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Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill

Volume 750: debated on Wednesday 18 December 2013

Committee (4th Day)

Relevant documents: 5th Report from the Joint Committee on Human Rights, 3rd Report from the Constitution Committee and 12th and 16th Reports from the Delegated Powers Committee.

Clause 26: Meaning of “controlled expenditure”

Amendment 160G not moved.

Clause 26 agreed.

Schedule 3: Controlled expenditure: qualifying expenses

Amendments 160H to 165D not moved.

Schedule 3 agreed.

Clause 27: Changes to existing limits

Amendment 166

Moved by

166: Clause 27, page 14, line 42, leave out subsection (1)

My Lords, in moving Amendment 166, I wish to speak also to Amendment 166B. At Second Reading, a number of noble Lords expressed concern about the changes to the existing limits on controlled expenditure that Clause 27 seeks to introduce. Justification for such a change is obviously necessary. The Explanatory Notes provide no assistance in understanding the rationale for this change. In his response at Second Reading the Minister, the noble Lord, Lord Wallace of Saltaire, did not explain what problems had been caused by the existing limits. I am confident that if there was sound justification for reducing the expenditure limits based on past experience of the operation of Section 85 of the Political Parties, Elections and Referendums Act 2000 within its limited scope of activities, the Minister would have advised the House of that. That is particularly so where justification was sought by noble Lords, but none was forthcoming.

If there have been no problems, why reduce the limits which have been in existence for at least 13 years? Moreover, how can the Government justify reducing expenditure limits while at the same time increasing the range of qualifying activities? In his reply, will the noble and learned Lord the Advocate-General please answer the following questions? First, what is the reason for Clause 27(1)? Secondly, what problems have been caused over the years by having the existing limits? Thirdly, in proposing to reduce the limits, what assessment did the Government make of the likely increase in expenditure caused by the extension of controlled activities introduced by Clause 26? If the noble and learned Lord has no answer that justifies this extreme provision, will he acknowledge the strength of feeling that exists that this clause is grossly unfair, is a disproportionate interference in the right to freedom of speech and political engagement, and is an obstruction to democracy?

On Monday in Committee, the noble and learned Lord repeated the Government’s commitment to bring forward amendments on Report that will increase the registration thresholds. That is a welcome acceptance by the Government that Clause 27(1) cannot remain in its present form. In these circumstances will the noble and learned Lord accept this amendment today to remove this clause? The effect of that will be to restore the status quo, and the Government can start afresh with their thinking about the appropriate limits informed by the debates that we are about to have today. Thereafter, the Government can come forward with a clause that is more appropriate and can be justified by Ministers.

I turn to Amendment 166B, which goes further than the previous amendment. The effect of the previous amendment is to restore the status quo as far as financial limits are concerned but it makes no allowance for the increase in the list of activities introduced by Clause 26. The inclusion of these activities justifies an increase in the present limits. I acknowledge that there should be some limit, but as the noble Lord, Lord Horam, said in his maiden speech:

“It is important not to damage civil society or freedom of speech”.—[Official Report, 22/10/13; col. 917.]

That is undoubtedly recognised by many noble Lords who spoke at Second Reading and by noble Lords who have put down similar amendments to increase the limits, albeit to different levels from me.

The current limits are £10,000 for England and £5,000 for each of Scotland, Wales and Northern Ireland. The amendment in the name of the noble Lord, Lord Hodgson of Astley Abbotts, suggests an increase to £14,000 and £7,000 respectively, whereas the amendment in the name of my noble friend Lord Ramsbotham proposes that they should be increased to £20,000 and £10,000 respectively, reflecting the recommendation in the excellent report of the Commission on Civil Society and Democratic Engagement. I join other noble Lords in congratulating my noble and right reverend friend Lord Harries of Pentregarth and his committee on their sterling efforts in its production.

My amendment adopts a different approach from that of other noble Lords. It abolishes the distinction between the constituent parts of the United Kingdom and proposes an increase to £25,000. The fifth report of the Committee on Standards in Public Life, The Funding of Political Parties in the United Kingdom, which was presented to Parliament in October 1998, recommended that the expenditure limit should be fixed at £25,000, hence my choice of that figure. No distinction was drawn in that recommendation, which was number 55, between the constituent parts of the United Kingdom. In their response, presented to Parliament in July 1999, the Government accepted the proposal for a scheme of registration for third parties but fixed the limit at £10,000. That response did not distinguish between the constituent parts of the United Kingdom. The footnote to paragraph 7.27 of that response is as follows:

“The Government believes that the lower threshold of £10,000, rather than that of £25,000 recommended by the Neill Committee, is appropriate, particularly in the context of third-party expenditure in Scotland, Wales and Northern Ireland, where expenditure of even £10,000 could have a significant impact”.

There is a hint of a distinction there, but the government response did not go as far as drawing one. I have been unable to find any subsequent explanation for setting the limit in the other countries of the United Kingdom at half the limit of £10,000 allowed for England. I recognise that a distinction should be drawn between the various countries when one considers total expenditure by a recognised third party in each one, because that distinction reflects the number of constituencies in each one. That distinction is preserved in paragraph 3(2) of Schedule 10 to the 2000 Act, but I do not understand the need for a distinction when it comes to the threshold for registration. My noble and right reverend friend Lord Harries of Pentregarth observed that the registration requirements imposed a,

“bureaucratic burden on small charities or campaigning groups, especially during the actual election period”.—[Official Report, 22/10/2013; col. 914.]

Similarly my noble friend Lord Best referred to the new list of controlled activities leading to a “disproportionately onerous bureaucracy”. That bureaucracy could operate to discourage groups from engaging in political debate at a crucial time in the electoral process.

If one is to encourage democracy and keep that bureaucratic burden to an absolute minimum, as high a figure as possible should be set within the overall limits of total expenditure. That approach will also benefit the Electoral Commission by reducing the number of organisations that it requires to monitor; £25,000 is below the current total allowable expenditure for each country, although I appreciate that it will exceed the total expenditure proposed in the Bill for each of Wales and Northern Ireland. Obviously, if these new limits are approved for these countries, a different figure should be fixed for each, but this amendment proceeds on the basis of current figures. On any view, even if changes are proposed in the Bill, the figure of £25,000 would seem appropriate for England and Scotland, because that is below the proposed overall allowance for each of these countries. I beg to move.

My Lords, we have Amendment 166A in this group. Before I come to it, I have a great deal of sympathy for the approach of the noble and learned Lord, Lord Hardie, but with an important reservation. I noted with interest that he referred to the advice of the Committee on Standards in Public Life, but the committee gave much more detailed consideration to some of these issues in its later report of November 2011. That is the context in which we are having this discussion. Our amendment seeks to return to the existing, well known situation of the registration threshold, with one very important qualification, to which I will refer when I also speak to the amendments being proposed by the noble and learned Lord, Lord Hardie, and others.

Nursing my cold and cough yesterday evening, I carefully read the whole of our Hansard proceedings on Monday. If anybody has been having as much difficulty in sleeping as I have recently, I fully endorse that as a very good way of avoiding insomnia. I was struck that almost all the constructive amendments to make this part of the Bill more workable and effective came from the Cross Benches, and from the Conservative and Liberal Democrat Benches. This clearly reflects the reality outside the Houses of Parliament. The organisations potentially affected by its provisions want to ensure that the Bill deals with the doubts and the defects in the existing law, the PPERA 2000, rather than simply maintain some of the unsatisfactory features of that status quo.

I have met representatives of literally dozens—scores, perhaps even hundreds—of organisations over recent weeks, some charities and some not, to discuss the perceived effects of the Bill. It is becoming increasingly clear that all serious organisations recognise that the loophole that could enable a single-issue-obsessed multimillionaire or campaign group to target huge sums of money into one or more marginal seats must be addressed. One of the problems with the other amendments in this group is that they do not restrict that targeting into a small number of seats. Our amendment does.

I am sorry to stop the noble Lord in full flow, but we have all had many conversations with charities over the past weeks and not one charity has mentioned that to me personally or to my noble friend. Can the noble Lord name the charity that has these grave fears?

My Lords, they are innumerable: NCVO, Bond and a whole number of organisations have said to us that targeting into one constituency or a small number of constituencies is recognised as a possible problem. It is not something that they necessarily want to do but they recognise that there could be a threat.

As my noble friend Lady Williams pointed out so powerfully on Monday evening, this type of deliberate distortion of our electoral process is far advanced elsewhere, in the USA in particular, but is already on its way this side of the Atlantic as well. By definition, however, we need to ensure that the net is not of so fine a mesh that we create a totally inappropriate bureaucracy for much smaller, much more locally based groups. Here I think I share the objectives of the noble and learned Lord, Lord Hardie, and others.

I referred on Monday to this essential balance between transparency and accountability on the one hand and excessive regulation on the other. The collective contention of very many organisations is that while the 2000 legislation was a concern and is defective, many of them simply did not have to worry in the past because their spending came beneath the existing thresholds.

In evidence to the Commons Select Committee, the chair of the Electoral Commission described the threshold as the measure that determined how far you go down in the pyramid of organisations engaged in campaigning. I think she described the situation very well. It is not a simple, two-dimensional triangle; it is a three-dimensional pyramid, so the further you go down in terms of the threshold, the more small organisations—huge numbers of organisations—potentially feel threatened and have to look to the way in which they are operating. At the top are a small number of large organisations that might seek deliberately and decisively,

“to promote or procure electoral success”,

of a party or candidate—the now accepted definition in the Bill—and at the bottom are a whole range of smaller bodies that are concerned that their activities might be perceived to be doing so.

We can continue to seek to reassure them as to whether they really would be caught by definition or we can provide explicit reassurance in the Bill by lifting the threshold to its existing level. I think we should do just that. Our amendment on this subject deals neatly with the conundrum that the Government have faced in so doing. My noble friend Lord Wallace of Saltaire said in his letter to colleagues on 5 December that in increasing the thresholds the Government would,

“need to take account of the consequences for the constituency limits set out in the legislation and the Government will reflect further on the detail of how to bring this about”.

This comes to the nub of the issue I referred to earlier. I hope that the amendment helps my noble friend.

The Minister was right, of course, that it would be plainly illogical to have a simple threshold of £10,000—or a much bigger one of £20,000 or £25,000—and then have a constituency spending limit during the post-dissolution period of £5,800. An organisation could be spending the whole limit of £5,800 and beyond without even being registered and therefore without declaring the expenditure. This would undermine the whole spirit of transparency and accountability that runs through the Bill. In the second part of our amendment, we stipulate that a higher threshold can apply unless all the spending is targeted in one constituency. I have heard the argument that this somehow adds complexity, but I do not accept that.

Of course, in a later group we will come to other detailed amendments, which clarify and make more workable the application of constituency limits. A whole section will do just that. I am sure that the Committee will recognise how crucial these are to the success of the Bill, and to its acceptance by MPs in the other place. After all, they themselves face very stringent expenditure limits at elections. When Amendment 166A in this group is taken in conjunction with our later Amendment 170A, which clarifies the scope of the constituency limit, it will be very clear when spending has occurred only in one constituency.

The Bill—like electoral law as a whole—is very complex, sometimes necessarily so. Those of us who have fought elections have been made increasingly aware of that over the years. I do not believe the caveat in our amendment, which would deal with the conundrum the Government face about the relationship between national thresholds and constituency limits, to be more complex than any other part of this area of the law.

Briefly, I am sceptical about Amendments 167A and 167B. I understand the rationale for them, but I do not accept that it is reasonable for someone to spend £20,000 on directly influencing the outcome of an election yet not to have to register. I accept that the value of money has changed since the 2000 Act, and there is a rational argument for inflationary increases. However, in this case the outcome of that rationale would lead to an unacceptable amount of unaccountable, non-transparent spending in constituency elections. I believe that our amendment provides a very good compromise position.

Before Report, I hope that my noble friend will be able to revisit not only the amounts involved but the reasoning for having different thresholds in different parts of the United Kingdom. It may be more sensible simply to have one single UK registration threshold. With the caveat I mentioned concerning constituency spending, this may be the clearest answer. I very much look forward to hearing what the Minister has to say. I hope that he will be able to respond very positively to our combined, very carefully drawn amendment.

My Lords, the noble and learned Lord, Lord Hardie, and my noble friend Lord Tyler have fought this issue pretty well. I will make a short contribution to the debate on this important topic. Amendments 167 and 168 accept that there need to be limits, but seek to change as little as possible. As was pointed out by the noble and learned Lord, Lord Hardie, the reason for this is that there is not evidence that the limits so far have caused great difficulties or given rise to many problems. The amendments therefore seek not to reduce the amounts from £10,000 to £5,000 and from £5,000 to £2,000, but merely to restore the purchasing power of those figures. I must say to my noble and learned friend on the Front Bench that I think £2,000 for a single constituency is a very low sum indeed. Hiring a hall and some audio equipment would make a very sizeable dent in that sum.

The Bank of England’s inflation indicator, a wonderful thing to play with of an afternoon, enables you to check purchasing power on any day from 1750 to 2012. The purchasing power of £1 in 1750 is equivalent to £187.76 in 2012, just as an aside. The relevant figures are from 2000 to 2012. The purchasing power of £1 in 2000 was equivalent to £1.42 in 2012. In other words, inflation has averaged 2.9% per annum, and therefore the purchasing power of £1 is now only 70p. On that basis, applying that across the piece, you come out with a figure of £14,200 from £10,000, or £7,100 from £5,000. I have merely rounded it to the nearest £1,000.

The reason for my contribution to this debate is that I think we want as few changes as possible. This matter was debated at great length during the PPERA proceedings, and all we seek to do is restore the status quo ante in terms of purchasing power. I hope that the Government will look with favour on this contribution to the debate on an important topic.

My Lords, I shall speak to Amendments 167A and 167B. The Government have indicated quite clearly that they will raise the registration threshold, so the question at issue is what the sum should be. We have had various alternatives put before us already today. The recommendation of the commission that I have the privilege of chairing is £20,000 for England and £10,000 for the other three nations.

The noble and learned Lord, Lord Hardie, reminded us of the Neill committee’s recommendation in 1998 that the limit should be £25,000 and that that should be the figure also for Scotland, Northern Ireland and Wales. He posed a very sharp question: why should the registration thresholds be lower for those nations? Although our commission eventually plumped for the figure of £10,000 for those three nations, we were very tempted to put it higher, particularly because of all the difficulties in Northern Ireland, the key role that charities are playing there and their great desire not to be identified with any particular political party at this time of emergence from conflict to democracy. There is therefore a very strong case for Northern Ireland’s registration threshold to be higher.

The reasons for the raising the thresholds are obvious. The Electoral Commission says that they should be raised to at least the present PPERA levels. The argument for raising them higher than that is, first, the increased range of activities—even if you take out staff time, as we hope the Government will, there is still an increased range of activities which will cost more money. The second is inflation. Perhaps most important of all is the stated aim of the Government to give smaller charities in particular more freedom of manoeuvre without the fear that they might overstep the line.

In our report, we summed up what all smaller charities were saying. They had said that,

“they limited or stopped altogether some campaigning activity in order to ensure they did not get close to the registration threshold. For many organisations, the perceived issue of reputational risk associated with registering as a third party was important in addition to the administrative burden. The reputational risk was a particular concern to some NGOs”.

This was the case with Oxfam. Evidence gathered for the report stated that:

“Oxfam deliberately chose to ensure their spending was capped under £10,000 so they didn’t have to register, because for charities, they see it as a real brand reputational risk, they have to register as a third party because we are meant to be really apolitical NGOs. But yes they do have large budgets but have chosen not to spend them on election campaigns”.

That question of reputational risk for charities in particular is an important consideration.

So much of this legislation, and the lowering of the thresholds in particular that we are talking about now, represents an attempt to escape the influence of the super-PACs in this country. It is as though a huge net has been thrown in order to catch some great fish which might swim across the Atlantic, but the only effect of which is to trap smaller fish quite legitimately swimming freely in the waters of democracy. I hope that the Government will raise the threshold very high indeed in order that their stated aim might be achieved; that is, that smaller charities can get on with their legitimate business of campaigning on policies without fear of being caught.

On Monday, the noble Lord, Lord Gardiner, referred to his 15 years working with the Countryside Alliance. He said that,

“we were punctilious about not promoting or procuring the electoral advantage of a party or candidate”.

I am sure that they were. He continued:

“We were punctilious about these matters”.—[Official Report, 16/12/13; col. 1097.]

In fact, we understand that the Countryside Alliance had specific legal advice that its activities would be subject to PPERA regulations if it spent enough on materials to breach the registration threshold. It did not register, but that is only because it did not spend enough on printed materials. As the case study in the second commission report shows, it would clearly have needed to register under the Bill because of the new activities subject to registration. Its activities were not just to become transparent through regulation but would have been restricted because of the lower spending cap and the very low constituency limits.

In our report we set out the particular case of the Countryside Alliance and the difficulties that it would find itself in as a result of the Bill, and I wonder whether the Minister was aware of that legal advice at the time. The Government have given lots of reassurances to charities that they are not in the business of promoting or procuring the electoral advantages of a particular party, but that reassurance does not work because the sting is in not that sentence but the qualifications. A charity campaigning on policy can suddenly find that inadvertently, even if it has not mentioned a political party, and even if its primary purpose is something else altogether, it is coming up to the line where it might be caught by this regulation. It is this in particular that the commission wishes to draw to the attention of the Minister as we debate this amendment on thresholds; they need to be as high as possible in order to allow the maximum freedom that should properly be allowed in a democratic society.

I ask the noble and right reverend Lord to give us his view about the last part of the amendment spoken to by my noble friend Lord Tyler. All the way through this, we are trying to find a balance between the very legitimate arguments put forward by charities, not least by the noble and right reverend Lord himself, and the real danger—I am sorry to have to say this again—of there being very heavy expenditure within one or a few constituencies that might, almost inevitably, alter the outcome of an election, despite the fact that it was not the intention to elect a particular candidate. At a certain point the level of material, campaigning and so on begins to reach such a high volume that it is very hard to make that distinction; indeed, it is an unreal distinction in those cases.

Secondly, it is crucial that we hear from the noble and right reverend Lord on the issue of bunching together different kinds of campaigns in a particular constituency. Does he recognise that it is not difficult to find all kinds of ways around our incredibly complicated registration and election regulations? It is therefore true that those small fish can grow to be quite big fish, and there is a temptation to follow the examples elsewhere. Not only does that give an illegitimate basis on which to hold the election but, perhaps equally important, it discourages people of moderate income from standing for Parliament because of the very large figures that they are supposed to meet. Will he address that part of the issue before he completes his presentation?

I have listened with great attention to what the noble Baroness has said, as I did on Monday when she suggested that the commission had not taken that point seriously enough. I was going to address it when we came to talk about constituency limits because there are a whole range of issues related to them. I notice also what the noble Lord, Lord Tyler, said about constituency limits, and I take very seriously what he has said: there is clearly a major issue there that has to be addressed. There are other issues connected with constituency limits that also need to be taken into account, though, not least all the complications of trying to ascertain which constituency it might be attributed to. I take seriously what noble Lords have said but, if I may, I will address it when we come to address the amendments on constituency limits.

My Lords, I put my name also to Amendments 167A and 167B on which the noble and right reverend Lord, Lord Harries, has just spoken. Essentially they are amendments about registration thresholds and I will confine what I am going to say, quite briefly, to that aspect. It is clearly accepted that the thresholds are going to go up from those proposed in the Bill, which are very low indeed. The question is clearly: how far? If the aim is to catch wealthy organisations and individuals and to prevent undue influence on the electoral process by those with money, the response has got to be proportionate, as I am sure the Minister would accept.

As the noble and right reverend Lord, Lord Harries, said, the mesh of the net has got to be set so that small NGOs and charities can carry on with their campaigning work without being frightened off by the fear of the expense and the staff time that registration and its associated bureaucracy—which I hope later we will cut down to a degree—will entail. The larger organisations are to be caught; the smaller ones should not be, so that they can carry on with their usual activity.

The current thresholds under PPERA have done just that; hence the lack of problems arising from the drafting of the definition. This was revealed only by the most recent consultation, because most small organisations simply did not meet the existing threshold. However, those thresholds will not be enough if the activities covered by the Bill, even the non-contentious ones, are included, as everyone agrees that larger staff costs will be included with them.

I remind the House that the Electoral Commission said in relation to this very aspect that,

“we think the Bill’s Impact Assessment under-estimates both the regulatory burden that the Bill would impose on registered campaigners, and the number of non-party campaigners that may need to register with us as a result of the Bill’s provisions”,

and the lower threshold. The Electoral Commission is going to be faced with a great deal more work.

I am sorry hear to that the noble Lord, Lord Tyler, has been having difficulty sleeping. Indeed, the speech from the noble Baroness, Lady Williams of Crosby, on Monday caused me some lack of sleep. She chided me about what I had said about ogres coming out of the woodwork, so I had a further look at it. Because she has just raised the point now, I will say this. She produced shocking figures about what was going on in America and raised the spectre of this somehow creeping across the Atlantic and affecting our electoral process. No specific evidence has been produced for the need for specific constituency spending limits. The Government have produced no specific examples in defence of their argument on this topic—for example, of disproportionate spending in one constituency that has had undue influence on the outcome.

However, this is not the only piece of legislation that deals with this matter. There is also the Representation of the People Act 1983. Even if there were to be targeting of a specific candidate in a specific constituency, that Act covers constituency spending by candidates and also—this needs to be restated—spending by non-party campaigners who have campaigned for or against a specific candidate. What is more, breaches of the Representation of the People Act are the responsibility of the police to investigate, with all the sanctions that follow from that. The Electoral Commission does not have the enforcement powers for these rules. So, if these people exist, we in this country already have the powers to deal with them and the mechanism to do so.

My Lords, I have not been part of the commission, but I support what the noble Baroness, Lady Mallalieu, and my noble and right reverend friend said about Amendments 167A and 167B. I was convinced by these amendments and then, when I heard the noble Lord, Lord Hodgson, with his extraordinary mathematics on inflation, telling us how much it actually costs to put on a show, be it a conference or a different occasion, I was completely convinced. Then the noble Lord, Lord Tyler, said that these things were costing far too much. Has he seen printers’ bills lately and does he know how much 3,000 leaflets will take out of your pocket in no time at all? These figures are still really quite limited, and I hope that the Government have seen sense. I have a feeling that we are not going to hear their answers because they are reserving them all for Report.

The issue I mentioned in relation to Clause 26 was that of smaller charities. The noble Lord, Lord Tyler, was quite right in describing the role of smaller charities. My particular question for the Minister was: what happens if these charities are linked in a coalition? I know that we are going to discuss the coalitions again, but it hinges on this a little bit. Many of these charities which were spawned by the larger charities—Oxfam and Christian Aid—are now growing in their own right but nevertheless have a symbiotic connection and are often seen together in conferences. Will the Government reflect on that effect on smaller charities as well?

My Lords, I support Amendments 167A and 167B. I have two questions for the Government that have not been raised. First, we have had no specific evidence from the Government that the previous spending limits were overly permissive, resulting in undue influence on the outcome of general elections. Therefore, I would be grateful if the Minister would outline what specific evidence gave rise to this clause.

Secondly, because it again comes from the Government, I note that the Electoral Commission thinks that the regulatory burden that the Bill would impose on registered campaigners has been grossly underestimated in the Bill’s impact assessment. With many Bills coming before this House, I have had occasion to question the depth of the impact assessment. It really must go into the impact on others who will be affected by the Bill, and that has not happened in this case.

My Lords, noble Lords from across the House have made it abundantly clear that the Government’s decision to significantly reduce the threshold at which organisations register with the Electoral Commission was not based on any evidence and would significantly hamper the ability of civil society organisations to participate in democracy in the run-up to an election. I add to that the comments from committees of this House and of the other place about the lack of an evidential base for this policy.

The Joint Committee on Human Rights said:

“We are not yet satisfied that the Government has sufficiently explained the need for the reduced registration thresholds (particularly in light of the increased range of regulated activities)”.

The Political and Constitutional Reform Select Committee said:

“In the absence of any evidence that there is a need to lower the threshold for third parties to register with the Electoral Commission, we recommend that the Government revert to the existing levels”.

The reductions are patently unreasonable and unfair, but they give rise to a particular concern because of the cumulative effect of provisions in the Bill. The evidence of that is overwhelming in the report of the commission. The noble and learned Lord, Lord Hardie, was right to ask what assessment had been made of the cost of the new obligations and bureaucracy. I look forward to the Minister’s answer.

The decision taken by the Government when they drafted the Bill to lower the thresholds at the same time as increasing the range of regulated activities—including, astonishingly, staffing costs, which we debated on Monday—suggests that the Bill is more about stifling dissent in the run-up to an election than about taking big money out of politics; at least, that is certainly the effect of the proposals that they have come up with. The Network for International Development Organisations in Scotland has said that,

“a prevalent fear is that it will put a halt to all activity. If the threshold is as it stands, that would be one member of policy staff. Everybody else would have to stop work. It would effectively cut down some organisations”.

The Electoral Reform Society agrees, and says that:

“I think that this will kill small organisations. They just won’t participate. There is just too much bureaucracy. They’ve never had to register before”.

Finally, the RSPB corroborated both these statements, saying that,

“it is illogical to halve the thresholds and caps at the same time as widening the activities that count towards them; this could seriously curtail legitimate charitable work”.

I wonder why the thresholds were changed and I would be grateful for an explanation from the Minister.

The noble Lord, Lord Tyler, was, in many ways, fear-mongering about the flooding of organisations by big money. I have looked at Bond, because the noble Lord quoted it. It said that big money in a constituency was “theoretical” and that no one had provided a specific example. As the noble and right reverend Lord, Lord Harries, said, we are casting our net to catch the large fish but it is the small fish—which play a hugely important part in making our civil society vibrant—that are being caught, and the governance of the country will suffer.

My noble friend Lady Mallalieu was very clear about the issue. The Commission on Civil Society and Democratic Engagement says, in its report:

“The most important measures to avoid undue influence, such as US style super PACs, are already in PPERA and the Representation of the People Act. In addition, none of the measures introduced effect undue influence in relation to political parties or candidates”.

I look forward to the Minister’s response.

In closing, I will say that I, like others, am particularly concerned about the situation in Northern Ireland, where the reduction to £2,000 is not just unfair and unworkable but absurd. On Monday, we all agreed that civil society has a vital role in sustaining the peace process in Northern Ireland, where the situation is still fragile, and the reduction in the threshold can act only as an impediment to the fantastic work of its vibrant and valuable civil society. I look forward to hearing from the Minister that the Government have, indeed, listened and will move on this issue.

My Lords, I thank the noble and learned Lord, Lord Hardie, for introducing these amendments. It has been obvious since Second Reading in this House, and indeed before, that the registration threshold has given rise to considerable controversy and debate. As noble Lords are aware, third parties that incur controlled expenditure are not subject to any electoral controls on their activities provided they campaign only up to a particular expenditure threshold in a relevant election.

The 2000 Act sets this threshold at £10,000 for third parties campaigning in England and at £5,000 for third parties campaigning in Scotland, Wales or Northern Ireland. As has been said by numerous contributors, the Bill amends these amounts to £5,000 and £2,000 respectively. The noble and learned Lord, Lord Hardie, perfectly fairly asked the purpose of this. The aim is to increase openness. There is a good argument that those who spend money in a way that can reasonably be regarded as intended to promote or procure success at any relevant election—to promote not a policy but the advantage of a party or candidate—should do so transparently. Amendment 166, tabled by the noble and learned Lord, seeks to return the thresholds to their original PPERA levels. The amendment tabled by my noble friend Lord Tyler seeks the same result, but proposes a third threshold of £5,850 where spending has been incurred solely in a single constituency.

My noble friend Lord Hodgson goes a step further and suggests thresholds of £14,000 in England and £7,000 in Scotland, Wales and Northern Ireland. The amendments tabled by the noble and right reverend Lord, Lord Harries of Pentregarth, go further still and propose thresholds of £20,000 and £10,000 respectively. Finally, the noble and learned Lord, Lord Hardie, suggests a registration threshold of £25,000 applied to each of the constituent parts of the United Kingdom.

Noble Lords will know that when a third party registers with the Electoral Commission, it becomes a recognised third party. Upon registration, the third party becomes subject to spending and donation controls for the duration of the regulated period of the relevant election. The Bill intends to ensure greater transparency of campaign finance, which is why it revised the current registration thresholds to £5,000 and £2,000. It was intended to have the effect that more third parties would be required to account for expenditure and provide details of the donations they receive, bearing in mind that the fact of registration means that the expenditure can reasonably be regarded as intended to promote or procure success in a relevant election for a particular party or candidate.

I was going to bring this up in our stand part debate, because it is important. With the permission of the Committee, I will do so now. On Monday an impression was given—I am sure misleadingly—by the noble and learned Lord, which he has just now repeated. He said that,

“organisations … will incur controlled expenditure … only where their activities, ‘can reasonably be regarded as intended to promote or procure electoral success’, of ‘parties’ or ‘candidates’”.—[Official Report, 16/12/13; col. 1042.]

He keeps using that phrase, which is accurate, and in the Bill. However, that is only part of the definition. The House needs to recognise the point that my noble friend made on Monday. It is not simply about promoting but also, of course, about reducing the chances of electoral success. I think that the examples given were of the campaign against the war in Iraq or against the bedroom tax.

I will make just one other point. The law goes on to state:

“In determining whether expenditure can reasonably be regarded as intended to promote or procure electoral success … it is immaterial that it can reasonably be regarded as intended to achieve any other purpose as well”.

That, therefore, could be activity that is aimed at some other purpose, but which may damage a party, and so it would be covered. I am sure that the Minister did not want in any way to give a misleading impression, but by continuing to concentrate only on activity to promote a party rather than to harm it by discussing a policy—a policy that could suddenly become it—that is wider than his words perhaps suggest.

I hear what the noble Baroness says. I am sure, as she recognises, that it is difficult to be criticised for quoting directly from the Bill. However, she makes the point that there could be detriment to a party. It is quite proper, too, that if a third-party organisation was to campaign to try to defeat the Labour Party’s chances in a range of constituencies and its activities could be quite reasonably seen as aiming to thwart the Labour Party in a campaign, it is important that there is transparency—that people know where the money comes from and what is behind the campaign to do down a particular party. On Monday we had a debate on principal purpose which the noble and learned Lord, Lord Hardie, introduced. Of course there can be other purposes. It may be that in trying to do down the Labour Party that group hopes to raise funds and increase its membership. However, that does not detract from the fact that there is an electoral purpose, which is what we seek to catch. I see the noble Baroness shaking her head, but it is important to remind the House that the definition we are talking about is one that her party put into legislation in the 2000 Act. It is slightly ironic that I am having to defend that definition, when her own party put it into the original 2000 Act.

That Act covered publications, which are quite clearly and easily defined as this. The worry about this clause is that it includes rallies that might happen. They are not aimed at harming the Labour Party. On Iraq, they were aimed at stopping the war. The effect was to affect a political party. Therefore again, the Minister is suggesting that the activity has to be aimed at electoral outcome rather than at a particular policy. Every group that has spoken this morning about this as a result of reading his words on Monday, says that his words are narrower than what its lawyers tell them is suggested by the wording of the Bill.

My Lords, it is not a subjective test—we made that very clear. The Labour Party did not put a subjective test into its legislation in 2000. It is an objective test. Therefore, to say that it is solely about what a particular third-party organisation aims to do is not a fair representation of what it says. It is about what can reasonably be regarded. That is an objective test, and we rehearsed all the arguments for and against an objective or subjective test. Therefore it is not unreasonable to remind the Committee about what is here in the Act, which is a definition that the Government introduced by amendment in the other place because people clearly expressed that they wanted us to use the tried and tested definition that was used in the elections of 2005 and 2010. However, I accept that there has been a perception of the possibility of a chilling effect. I think I said that on Monday, and I accept that representations have been made to me and to my noble friends.

In the light of what the noble and learned Lord is saying, could he clarify what the position would be if a charity, or a non-charity, had a core campaign on which it had been working for some time, and during the regulated period the Government of the day, or an opposition party, adopted that policy—or, indeed, adopted a policy directly contrary to it? A party might adopt that campaign objective as policy—or, indeed, a party might introduce legislation affecting it. If the organisation steps up its campaigning because of the change in the political situation, does that core policy not then become something that is brought under the Bill, where it would not otherwise have been?

I think I addressed that point in our debate on Monday, and I quoted from the Electoral Commission’s guidance on the subject. The noble Baroness’s final sentence was interesting, because she asked what would happen if the organisation stepped up its campaign. I think I gave reasons on Monday why, if an organisation had a campaign that had been going on for many months or even years, and one party subsequently decided to endorse it, that should not affect the organisation. However, if it seized on that development and sought to ratchet up its campaign by several notches, and encouraged—at least by implication—people to vote in a certain way, that would make a difference. That is reflected in the Electoral Commission’s guidance. On Monday we had a discussion on whether it would be better to clarify such things in the Bill or to leave it to guidance. That is a perfectly legitimate question, and as I said then, it is one on which the Government would obviously want to reflect.

Will the Minister, during the reflective period, focus on the idea of something that suddenly becomes topical because the Government of the day introduce a Bill that does exactly the opposite of what the campaigning organisation wishes to achieve? He talked about “ratcheting up”, or increasing the volume. Surely that would be an inevitable part of campaigning if the organisation were suddenly faced with what it saw as a piece of hostile legislation. Would that organisation not then be able to campaign actively against the measure—although presumably, that is not something to which a Government who were anxious to encourage democracy would object?

We had a very thorough debate on this subject on Monday; I do not want to go over again everything that I said then, and rerun that debate. I will certainly reflect on what the noble Baroness has said; indeed, I spoke on Monday about some of the clarity sought. I think that the noble and right reverend Lord, Lord Harries, was encouraging me to act, and said that a number of people wanted to put things in the Bill. He listed a number of things, and I said that there had to be a balance between what we put in a Bill and what we leave to guidance. That is a perfectly proper matter for us to reflect on, and we shall bear the noble Baroness’s comments in mind.

I was about to say that charities and other campaigners had expressed fears that because low-level campaigning and expenditure could be regulated as a result of the Bill, small organisations would face a disproportionate reporting and compliance burden. Those concerns have been reflected in most of the contributions this morning. My noble friend Lord Tyler talked on Monday about the balance between transparency and regulation. Almost inevitably, the more transparent we seek to make the arrangements, the greater will be the amount of regulation. That point was echoed this morning by my noble friend Lady Williams.

This is the balance that we are trying to get right. We believe that there should be greater clarity about who is campaigning for the electoral success of parties or candidates—but equally, we do not want small campaigners to be dissuaded from taking part in public debate by fear of having onerous burdens placed upon them. Therefore, in line with what my noble friend Lord Wallace of Saltaire committed in the House on 5 November, as I have said, and, indeed, as I said when opening the first set of amendments on Monday, the Government will bring forward amendments on Report to increase the registration thresholds.

Will my noble and learned friend make one point absolutely clear to the Committee? If, as has been suggested this morning, the registration threshold was moved as high as £25,000, it would be perfectly possible for an organisation or individual to spend £24,999.99p in one constituency without being in any way accountable for how that money was spent and without having to be transparent about where the money came from, even though that sum would far exceed what we might expect to have as the limit on spending. It simply would not be known that that was happening because the registration threshold was so high; hence the significance of the measure that my noble friends and I have tabled.

My noble friend anticipates what I was about to say. However, he is right, subject to the caveat in the Representation of the People Act and its interplay with the restrictions on spending in individual constituencies, that sum would be almost twice what the candidate could spend. It seems a bit perverse that, if you have a campaign, you cannot answer for it if you are a candidate or party. However, we will come on to the constituency limits and the important interplay with the Representation of the People Act.

The noble and learned Lord, Lord Hardie, referred to the figure of £25,000, which, as my noble friend says, would allow quite a lot to be done without the need for transparency. Nevertheless, the noble and learned Lord made an important point abut there being the same threshold in each of the constituent parts of the United Kingdom. At a very early stage—I think before I had been given the “hospital pass” —I met a group of citizens in my former constituency as my successor thought that it would be a good idea for me to meet them. One of the points that they made was that, in reducing the thresholds from £10,000 and £5,000 to £5,000 and £2,000, there had been a bigger pro rata decrease for Scotland, Wales and Northern Ireland. I have certainly raised that issue. It is an important issue with regard to what the threshold is in the different parts of the United Kingdom. I certainly undertake that we will consider that point. I think it was also raised by the noble Baroness, Lady Royall, specifically in relation to Northern Ireland.

I reiterate the point made by my noble friend Lord Tyler with regard to constituency limits, consistency and not subverting the constituency limit by having a threshold that is too high. I accept that some of those who argue for a higher level do not want a constituency limit at all, but we shall deal with that in greater detail later.

I repeat that our objective is to ensure transparency, but we need to strike a balance. We do not want to have a chilling effect, even if it is just a perception on the part of smaller organisations that they would exceed the threshold even if their activities were not necessarily ones that would require them to register. Therefore, I repeat that we believe a substantial increase from the level in the Bill would, indeed, be appropriate.

The noble and learned Lord, Lord Hardie, possibly in a festive mood, tried to be seductive by suggesting that we accept his first amendment and restore the status quo. It is seductive but, at the risk of spoiling the Christmas spirit, I do not think that the legislative hokey-cokey of “in out, in out and shake it all about” is the best way to do this. The Government will bring forward an amendment on Report which, as I have indicated, will introduce a substantial increase from the level in the Bill. On that basis, I urge the noble and learned Lord to withdraw his amendment.

My Lords, I am grateful to noble Lords in all parts of the House for speaking in this debate. The noble Lord, Lord Tyler, suggested that the 2011 report was the more appropriate one. I went back to the 1998 report because that was the one which founded the 2000 Act, which set out the limits that we are discussing. On that basis, I went back to that report to find the justification for the legislation.

I hear what the noble and learned Lord the Advocate-General has said in response. I am disappointed that despite his white hair he is not Father Christmas and will not give me the gift that I was seeking. But I look forward to the amendment on Report and hope that it sets appropriate levels, and may not be confined to the £2,000 and £5,000 levels, but will be above that, if the Government are truly listening to the concerns of the third sector. With these observations I beg leave to withdraw my amendment.

Amendment 166 withdrawn.

Amendments 166A to 168 not moved.

Amendment 169

Moved by

169: Clause 27, page 15, line 1, leave out subsection (2)

My Lords, Amendment 169B also stands in my name.

The issues here are similar to those raised in the previous group of amendments, except that they apply to the total control of expenditure that may be incurred by a recognised third party in the various constituent countries of the United Kingdom. The current limits are contained in paragraph 3(2) of Schedule 10 to the Political Parties, Elections and Referendums Act Act 2000. Clause 27(2)(a) proposes to alter these limits by substituting them for,

“2% of the maximum campaign expenditure limit in that part of the United Kingdom”.

The effect of that provision is that the relevant figures for the countries are: £319,000 for England, reduced from £793,000; £35,000 for Scotland, reduced from £108,000; £24,000 for Wales, reduced from £80,000; and £10,080 for Northern Ireland, reduced from £27,000. My concerns about these reductions are similar to those about the reductions in registration limits.

I will not repeat the figures, but I will ask the noble and learned Lord the Advocate-General to justify the changes in this particular paragraph. The activities subject to control have been extended, yet it is proposed to reduce the total permissible expenditure. Moreover, the period covered is 12 months before an election. At Second Reading I drew attention to the following anomaly: in the context of Scotland, I doubted whether a campaign group could fund a national rally about an issue of importance to it, within a budget of £35,000. Even if it could, such a rally would exhaust its budget, leaving it unable to campaign effectively in any other way.

The unrealistic level of expenditure is highlighted when one has regard to the provisions in paragraph 5 of Schedule 10 to the 2000 Act about elections to the Scottish Parliament. The relevant figure for controlled expenditure is £75,800 and the relevant period is four months prior to the election. At the risk of showing my lack of the mathematical expertise that the noble Lord, Lord Hodgson, has, I say that a simple arithmetical approach of multiplying that figure by three would produce an equivalent annual figure of £227,400. But that, I acknowledge, is oversimplistic, as the greater part of any allowance will be expended in the last few months prior to an election. Accordingly, although probably still higher than the current annual figure of £108,000, the equivalent extrapolated figure would be approximate to it. If the proposed figure of £35,000, represented by the 2% introduced by Clause 27(2), is implemented, the discrepancy between the allowance for UK elections and elections to the Scottish Parliament is vast. Such a discrepancy for the same country in the same schedule to the 2000 Act demands an explanation and justification. In his reply will the noble and learned Lord the Advocate-General provide the House with the required explanation and justification for this disparity?

The deletion of this subsection will restore the status quo as far as limits are concerned, although the burden on that expenditure will be greater if the definition of controlled expenditure is expanded as proposed. I invite your Lordships to conclude that the effect of Amendment 169 would be to restore some public confidence in the democratic process and to avoid the absurdity and likely confusion that will arise from such disparate figures in Scotland, where campaign groups will be subject to different regimes within the same geographical boundaries.

Amendment 169B was tabled in case the previous amendment was not accepted, and the Government remained determined to reduce the overall figures and could justify such a policy. This amendment is a proposed compromise. By increasing the percentage from 2% to 5% the figure for England is more approximate to the current figure, and might even be slightly higher; but the decreases for Scotland, Wales and Northern Ireland are less dramatic. The equivalent figure in Scotland would be £87,500. I beg to move.

My Lords, I wish to speak to Amendment 169A. I would like to ask the Minister what the rationale was behind such a drastic reduction in the spending limits. For England it was a 60% reduction; for the other nations it was 70%. This is a vast reduction, for which no reason was given. The commission which I have the privilege of chairing simply wishes to revert to the original PPERA figures plus inflation. Those are written in the amendment, and would mean £1,125,000 for the year for England; the comparable figures for Scotland, Northern Ireland and Wales would be £155,000, £86,000 and £40,000. We are simply recommending the original PPERA figures plus inflation.

I will give one example of a big spending campaign which is concerned about the cap. In the 2010 general election, Hope not Hate registered £319,231 of spending in England with the Electoral Commission. It is a national grass-roots organisation that seeks to challenge and expose openly racist political parties, candidates and policies. It works on the assumption that there is a risk that far-right racist policies might be campaigned on vigorously at election time, and it wishes to oppose that with racially tolerant policies. For example, in an area like Barking and Dagenham in 2010 where it mobilised people, its spending included printing of leaflets and Hope not Hate newspapers, staff time to write campaign literature, media coverage costs, communicating the campaign to supporters, and its battle bus bill. Of course, an organisation such as this, quite properly, needs to register and needs to be totally transparent in what it does, but the spending limits proposed in the Bill would severely reduce what that organisation would be able to do. It spent in 2010 £319,231, which is above the limit in the Bill. There is clearly a strong case for reverting not only to PPERA but to PPERA plus inflation on the cap.

I wonder if I may ask the noble and right reverend Lord a question. He and his commission have justifiably encouraged us to see the package—how different elements of the Bill stick together. I draw his attention to the fact that his amendment, combined with other amendments to remove all constituency limits that he and his colleagues have proposed, would, if they were to be implemented, mean that the sum of £1.25 million could be spent in a small number of target marginal constituencies. That is a huge sum of money. When we come to the other sections that deal with constituency limits, will he think about the implications of the interaction between those two propositions from his commission?

The commission is keen to emphasise that every aspect of the Bill is integrated with every other. Clearly, constituency limits have to be taken into account very seriously when we are thinking about raising either the threshold or the cap.

I intervene briefly to support the Government and oppose the amendments put forward from the Cross Benches because the overall argument about undue influence is important here. As the noble Lord, Lord Tyler, has just said in his intervention, it is not only a question of the total amount of money spent but of the way in which it is deployed in any geographical area, whether it is in one constituency, a number of constituencies, Scotland, Wales or England. That is the problem and that is why the Government are right to try to reduce the spending limits, with a view to reducing the possibility of undue influence.

There has been some discussion of the figures of a 60% or 70% reduction, and I obviously do not know exactly how they were arrived at in detail, but I know, as we all know, what happened at the last general election. As the noble and right reverend Lord, Lord Harries, rightly pointed out, spending by the Hope not Hate campaign throughout the whole country totalled £319,000. It was the third biggest spender, and only two registered third parties spent more than the Government are proposing—the public services union, Unison, which spent £671,000, and Vote for Change, which is a Liberal Democrat-backed organisation wanting change to the electoral system. Those are the only two organisations, apart from Hope not Hate, which spent anywhere near or above the amount proposed by the Government.

I fully accept that there will now be a different definition of controlled expenditure, and on previous amendments I pointed out that the Government should look very carefully at what is included in controlled expenditure, particularly in relation to staff costs. If they were to be removed from the definition of controlled expenditure, most of the problems in that regard would be solved. However, leaving that aside, the fact is that the spending of most other organisations that registered—all the fuss is about only the 30 or so organisations that took the trouble to register in the last general election—was way below £319,000, which is the limit proposed by the Government in the Bill. There is plenty of headroom there for people to run a proper campaign, given that they can concentrate those resources in a particular area. However, it is the overriding view of the Government that such a campaign should not unduly influence the result in any particular constituency. It is therefore entirely consistent with the logic of their position to reduce the spending limits as they propose.

I hope that the noble Lord is not suggesting that the Hope not Hate campaign unduly influenced the election with that £319,000, which was spread right across the country. Was it not a fundamental expression of democratic rights that that campaign should have been able to do that? I am sure that he would not want its work to be hindered.

I would not want its work to be hindered but there should not be undue influence in any particular set of constituencies or a constituency. That is what concerns me. If the noble and right reverend Lord says that this campaign was across the whole country, then clearly there was not an undue influence. None the less, if a campaign is focused on particular areas there may be undue influence.

My Lords, I rise very briefly indeed to support the proposal contained in the commission’s amendment, and simply to say in answer to the noble Lord, Lord Horam, that I am unaware of an example—I still await one, although I have asked a number of times—of where there has been undue influence as a result of excessive spending in one constituency or spending specifically directed against a candidate in the last election. It does not appear to have happened. This is a pretty draconian cut of between 60% and 70%. It is perhaps right that I should simply add that, so far as the commission is concerned and the package that has been spoken of, those figures reflect a period of 12 months. If, as I hope happens, the period is to be reduced to six months, those figures would need to be adjusted accordingly.

My Lords, I wish briefly to draw attention to what the Joint Committee on Human Rights said about this. I am a member of that committee and I apologise because I have a meeting this afternoon and will not be here for much of the rest of our debates. The committee acknowledged that the Government were right to review the maximum spending limits; I imagine that they need to be reviewed every so often, not least because of inflation, which the amendment addresses.

The committee’s report makes the point about the lower limits now being,

“applied to a wider list of controlled activities (such as media events, rallies, canvassing)”,

and that,

“the Government admits that it is difficult to assess how much is currently spent on these additional activities by third parties and therefore it is difficult to assess the impact of the measure. The Government’s inability to provide this assessment is of concern, and adds to the overall uncertainty and lack of understanding regarding the Bill”.

Is the Minister able to provide some assessment of what this will mean and allay the concerns that have been raised? In the absence of that and of decent evidence, which is generally lacking around the Bill, I strongly support the commission’s amendment.

My Lords, it will probably come as no surprise that the Labour Party supports reducing the cost of politics, not simply because that is right nor just because of the warnings sounded by the noble Baroness, Lady Williams, who is not in her place, on Monday and this morning, but perhaps because Labour is outspent by the Conservatives. The current situation is bad for democracy, not simply for ourselves, and the major reason is because money and politics rarely mix. We want all groups, candidates and parties to be able to put their views to the electorate without needing to raise large sums or without having to be rich enough to fund a campaign themselves.

Although we are slightly unsure about the wording of the Bill, we think we have much in common with the intention behind the Government’s changes, in that we support transparency and lowering costs. However, we are concerned, for the reasons that we have just heard, about what they have sought to do and the figures that they have chosen. Neither the noble Lord, Lord Horam, nor the rest of us know where the figures come from. The Electoral Commission quite rightly says that it is for the Government to propose and for Parliament to decide on the appropriate limits, in order to balance that freedom of expression against controls of undue influence. The commission listed some of the factors we ought to think about, such as inflation and the wider range of activities. However, we find it difficult to see how the Government have thought about those matters in the way that my noble friend Lady Lister suggested because we have seen nothing of the assumptions that they have made about the costs associated with policy research, press, meetings, debates and staff, which will now be covered by the Bill—and over a 12-month period.

In the earlier debate the noble Lord, Lord Tyler, compared what a third party might be able to spend against what a candidate might spend; of course we are talking about a 12-month period, not when the candidates are affected in the short campaign. So, as others have done, we ask: what are the factors that led to these figures? Were they grabbed out of the ether, rather like the 500 seats in the Commons that the Government, as the House will remember, were set on last time? Did these figures just come out of a roulette wheel without rhyme or reason, or is there something that we could look at to test the Government’s assumptions that these are the rights figures? Without that, it is very hard to see the logic behind them.

My Lords, again we are grateful to the noble and leaned Lord, Lord Hardie, for introducing this part of the Bill and the consideration of the overall spending limits. As no doubt the Committee is aware, third parties are subject to limits on the amount of controlled expenditure that they may incur during the regulated period of a United Kingdom parliamentary general election. The initial figures set out in PPERA 2000 set the limit at £988,500 for the whole of the United Kingdom and this Bill, as has been heard, seeks to amend that limit to £390,000. The limit in either case is of course the aggregate of individual limits of each part of the United Kingdom. That means that expenditure is allocated in accordance with where its effect is most significantly felt. If a body has its head office in Scotland, for example, but undertakes and targets its campaign work only in England, then that spending will be allocated to the English limit and not the Scottish one.

The noble and learned Lord, Lord Hardie, has tabled amendments so that the spending limit for third parties remains as it is in PPERA 2000, and the noble and right reverend Lord, Lord Harries of Pentregarth, has proposed limits that would take the spending limit to £1,406,000 across the United Kingdom as a whole. This substantial increase, as I understand it, is to reflect inflation since the original limit was set 13 years ago. There has been considerable discussion, not just in this House but also in the other place, about third-party campaigners and the potential to incur significant amounts of expenditure in campaigns. This was spoken about very eloquently by my noble friend Lady Williams. The noble Baroness, Lady Hayter, indicated that her party has no desire to see the cost of politics increase, nor, indeed, do we want to see a disproportionate effect on elections by those who have lots of money to throw around.

There is also the potential, given that limits are imposed on political parties—let us remember that, if we look at this in its full context, there are limits on political parties—that we would undermine that regime if their supporters could still demonstrate their backing by diverting funding to a formally or informally aligned party. Allowing very large sums to be spent to the benefit of parties that are candidates in this way risks, I believe, undermining the basic rules that have evolved over the years in terms of restriction of political spending in elections. The nature of third parties means that controls on their spending are necessary. I do not believe that we have really debated limits, but I do not think that anyone has challenged the principle that there should be some control on substantial spending.

There is some evidence of third-party expenditure increasing. In 2010, eight third-party organisations spent more than £100,000, although, as I think my noble friend Lord Horam correctly pointed out, most who were registered—and only 30 were registered—spent considerably less than that. Indeed, some who were registered spent nothing at all. Although there were eight who spent more than £100,000 in 2010, in 2005 only two groups did so. I believe, and we have said all these things many times, that it is about trying to strike the right balance to ensure transparency. We believe that the figure in the Bill is a reasonable limit for national third-party campaigning. Most campaigns in the last election did not spend anywhere near either the total amount that was available then or the amount that is proposed in this Bill.

It has been argued that these previous campaigns did not require third parties to account for a much wider range of activities, but it is worth reflecting on the fact that the Green Party, a political party, spent £330,000 on its national campaign in the 2010 general election. That campaign activity included incurring expenses on advertising, unsolicited materials, manifestos, market research, transport, media events and rallies—all activities that third parties should also account for. No one can doubt that the Green Party had a very strong voice in that campaign and indeed succeeded in getting its first ever Member elected to the House of Commons. It was a voice within a national debate. In fact, only four out of well over 100 registered political parties spent more than £390,000 in 2010: the Conservative Party, the Labour Party, the Liberal Democrats and the UK Independence Party.

We are setting a limit which, as I said, only four political parties exceeded in 2010, and a party that was recognised as having played a full part, albeit without standing in every constituency, in a national election in all its activities spent less than £390,000. We do not believe that third parties should be dominating the electoral landscape—by “third parties” I do not mean political parties but such as we have discussed in this debate, as of course I think third parties have an important role to play in the party-political scene—and creating campaigning inequality among political parties. We believe that the spending limits are appropriate and proportionate.

The noble and learned Lord, Lord Hardie, drew attention to the differential that exists in Schedule 10 to the 2000 Act, and I accept that this Bill is looking at the UK limits. It will also recognise that while you might have a campaign to be undertaken on a pan-UK basis, it is not quite the same as if you were focusing solely on Scotland for a Scottish election and so I think that there is some scope for a differential.

We believe that, having reduced the limit to a sum that has not inhibited, or would not have caught, the Green Party at the last election or indeed the vast majority of third parties that were registered and campaigned, this is not an unreasonable balance to be struck. I invite the noble and learned Lord to withdraw his amendment.

Will the Minister not acknowledge, in relation to the spending by the Green Party, that of course it did not have to include staff costs in the figure that he quoted? As the Bill now stands, third-party campaigners have to include staff costs, so there is not an even playing field. Furthermore, will he acknowledge that the whole political landscape now is very different from what it was, say, 20 or 30 years ago, with a dramatic decline in political-party membership and the rise in membership of third-party campaigners? Does the apparent indifference of so many people, sadly, to political-party campaigns and their enthusiasm and commitment to third-party campaigns not indicate that third-party campaigns should be treated equally seriously as a fundamental feature of our democracy along with political parties, particularly at election time?

The noble and right reverend Lord, Lord Harries, makes a fair point that, as a party, the staff costs were not included, but I think one of the reasons was referred to by my noble friend Lord Gardiner on Monday. Political parties’ staff are fully committed and are very transparently fighting an election, whereas one might reasonably assume that, when larger organisations undertake political campaigning—and we accept that they are registered because they believe that their campaigning could reasonably be judged to give an electoral advantage, or disadvantage, to one party or another—their staff’s time is not entirely taken up with it. He makes a fair point, but there is also a distinction because it would not be the entire staffing costs of a particular organisation that would be taken into account.

I wholly accept the point that has been made about the richness of the debate, with groups contributing in ways they have not done before, much of which is made possible, I suspect, by electronic media. Those of us who have had to stuff envelopes in the past probably realise that there are easier ways of campaigning and getting the message across, as well as being cheaper than the printed material which the noble Earl, Lord Sandwich, mentioned in his earlier intervention. In some respects, campaigning costs themselves have gone down over the years because of the nature of much of modern campaigning.

In the end, in the context we are debating here, elections are about getting candidates elected to the other place. In that regard, if third-party organisations are involving themselves in that effort and doing so in ways that could reasonably be seen to influence the outcome of the election—or at least work is done to the advantage of one party or another—it is not unreasonable that there should be some transparency in that. Equally, it is not unreasonable that the rules which have been set about party-political expenditure should not be got around by a much larger amount of expenditure being available to a third-party organisation which may, in one way or another, informally be aligned with promoting the interests of one of the established political parties.

We should bear in mind what is happening in other parts of the world. My noble friend Lady Williams referred to the Crossroads organisation. I am always two weeks behind with the Economist, but I read it on my way down last Monday. It has an article in the 30 November edition which noted that last year some $180 million was raised by Crossroads Grassroots Policy Strategies, which included 50 donations of at least $1 million. The article goes on to say:

“No one knows who those generous people were”.

That is what we are seeing in other parts of the democratic world and it is something that we have to be on our guard against. On that basis, I invite the noble and learned Lord to withdraw his amendment.

I have been listening to the debate in as objective a fashion as I can manage. The noble and learned Lord has made a strong case for why the limits should perhaps not be increased, and to me he has also made a strong case for why the existing system is working well. The bit that still puzzles me, particularly in the light of the increased coverage of the new definition of controlled expenditure, is the justification for actually reducing the limits. That, I am afraid, I have not been convinced by.

My Lords, I think I indicated that even with the reduced limits, on the list I have before me there were only two organisations that went above them, one being UNISON and the other being Vote for a Change Ltd, and neither of those got anywhere near the limits set out in PPERA. Even with the reduced limits, most organisations would not get anywhere near them. I take the point made about staffing made by the noble and right reverend Lord, Lord Harries. Even a political party, the Green Party, which fought a fully fledged election campaign, admittedly not in every constituency but one that registered in the national campaign, did not reach the reduced limit. In trying to strike these balances, these limits are not unreasonable.

I am grateful to noble Lords on all sides of the Committee for participating in the debate. I hear what the Minister has said about what the effect of these limits would have been had they been applied to the last election and I want to reflect on that. I note also that the noble Lord, Lord Hodgson, referred to the experience of the last general election.

I think that the noble and learned Lord also acknowledged that much of the difficulty might be removed if staff costs were taken out of the equation. Certainly that is a point the noble and right reverend Lord, Lord Harries of Pentregarth, raised just now. I wish to reflect on these matters before Report, but in the meantime I beg leave to withdraw the amendment.

Amendment 169 withdrawn.

Amendments 169A and 169B not moved.

Amendment 170 had been withdrawn from the Marshalled List.

Debate on whether Clause 27 should stand part of the Bill.

My Lords, we gave notice of our intention to oppose the Question in order to say some of the things that have now been covered, so the Committee will be pleased to learn that I shall not repeat them. One of them is the lack of rationale given for the figures for the threshold and, indeed, for the spending limit. I congratulate the Minister, who has managed to give a whole answer without explaining why the figures were chosen. Given the questions that he was asked, it is a clever move. It remains the case that the Electoral Commission, which after all is the Government’s independent adviser, has called on them to raise the thresholds and put up the spending limits, because everything is going to be covered. Some organisations have been mentioned already, but the BMA, NCVO, RSPB, Oxfam, the Royal College of Nursing and ACEVO, which have to work with this, all say that they do not know why the changes to the thresholds and the spending limits are there, or how the new figures were chosen. That remains our worry about this clause.

I want to add one point, but I do not want to repeat the exchange that the noble and learned Lord and I had on the first group of amendments today. He again used the phrase that the provisions will cover only those things that are done in a way to “influence” an election. But as we know, the law says that it is immaterial whether something can be regarded as intended to achieve any other purpose as well, and therefore things that can be done not with the intention of influencing an election could well be covered. The definition of electoral material goes on to include, for example, a definition of a “candidate”, which,

“includes a future candidate, whether identifiable or not”.

There is no need to mention parties or candidates by name for an activity to be deemed to be controlled expenditure. That, I think, is one of the issues that remains with us even after the debates today. I think the Government still feel that the NGOs are exaggerating the potential damage. However, the NGOs will continue to worry about what is covered by both sets of limits in this clause, and by the lack of a rationale for the new figures.

My Lords, I thank the noble Baroness for raising these issues once again. The Government accept that the figures for the spending threshold for registration set out in the Bill need to be revisited, and I suspect that the outcome of that will reflect the concerns that have been expressed. However, I do not think I can honestly say that there is a scientific means of arriving at a figure, any more than I suspect the Labour Government used a scientific method to reach their figures for spending limits and thresholds in 2000. I repeat that the balance we seek is one that will secure greater transparency but not lead to unnecessary regulation, particularly taking into account the concerns that have been expressed by a number of smaller organisations. I hope that when we come back with our amendment, it will meet the test of not imposing undue burdens but providing for fair transparency.

I shall not rehearse again all the arguments that were made in the debate immediately prior to this on the total spending limit, but we must have regard to the fact of what one political party is able to do, and bear in mind that the fifth report of the Committee on Standards in Public Life thought that the existing limits were quite generous. Of course, no science will ever get this absolutely right, but the figure will nevertheless still allow the healthy involvement of a number of campaigning organisations.

The possible difference between us is that the noble Baroness takes the view that a subjective test should apply, whereas we are sticking by the objective test. That is a perfectly legitimate difference of view for us to have, but I believe that the objective test is more rational. It is reasonable and is the one that informed the legislation currently on the statute book. In respect of some of the concerns that the noble Baroness has expressed, organisations which are properly campaigning on issues and trying to persuade Governments to change policy or reinforce policies they already have would not be seen, on an objective test, as trying to secure an electoral advantage.

I hope that that reassurance will be passed on because it is important that those organisations continue to play their very proper role in trying to persuade Governments, Oppositions or whoever about particular policy issues. There is certainly no desire on the past of this Government to try in any way to inhibit that. With those remarks, which I hope were reassuring, I ask the Committee to agree that the clause should stand part of the Bill.

Clause 27 agreed.

Clause 28: Constituency limits

Amendment 170A

Moved by

170A: Clause 28, page 16, line 22, leave out from “if” to end of line 23 and insert “the expenditure relates to—

(a) sending election material falling within paragraph 1 of Schedule 8A which is—(i) addressed to, or(ii) by virtue of delivery instructions directed to,any person registered, or entitled to be registered, in the register of parliamentary electors for any particular constituency, or to households within a particular constituency;(b) unsolicited telephone calls falling within paragraph 2 of Schedule 8A, made to such persons or households.( ) For the purposes of this paragraph, “election material” is defined as in section 143A.”

My Lords, I should apologise to Members who were anticipating that by now we might be moving on to the QSD. It is certainly not at my insistence that this group of amendments should be taken at 1.41 pm. However, as we have been gathering from all sides of the Committee during discussions this morning, the constituency limits, which are the subject of Clause 28 and therefore of this group, are very important and of central significance to the Bill.

We have heard that the Government did not bring this legislation forward to affect charity campaigning or to stop NGOs having their say about policy issues. The purpose of the Bill is to stop big money flooding into constituencies in the year before an election in an attempt to, in one direction, augment or to subvert candidates’ own spending limits. As I have already had occasion to say to the Committee, even if we in this House did not think that was important, there will be Members at the other end of the building who would think that it was extremely important—not least, perhaps, those pro-Europe Conservative MPs and candidates who might well be targeted by substantial sums of money, let alone others who may be in a similar position and a target for single-issue campaigning by individuals, multimillionaires or organisations.

Clause 28 is very important but it is by no means perfect, as has already been made apparent by many noble Lords this morning. The Bill talks about activity that has “significant effects” in a particular constituency or group of constituencies. The difficulty is that some of the groups that we have all met might, for example, hold a rally in one constituency which would have an effect on a great many others. I recall chairing just such a constituency rally, but if it had that significance for neighbouring constituencies in Cornwall, it would be very difficult to allocate the actual expenditure in any particular way. It would be very difficult to see what relative effect this was going to have in different adjoining constituencies. Frankly, as a former candidate, I rarely worried about somebody holding a meeting in the neighbouring constituency—or, for that matter, even in my own constituency—in terms of that affecting the outcome of the election. What affects elections most strongly is direct communication with electors and, as has already been mentioned this morning, the means of doing that have become more effective and cheaper in recent years. That is what can really sway a constituency result one way or another.

Our lead amendment, Amendment 170A, seeks to make the constituency limit about just those direct activities. The Electoral Commission cites our amendment as having “potential benefits”. It would define the limit as dealing with election material—leaflets, letters and so on—sent to electors, in one way or another, through their doors. It would deal also with what is called “push” polling. That is where someone rings up to say, “Are you aware of the Labour Party’s record on crashing the economy?” or, for example, “Are you aware of the Conservative Party’s plans to give inheritance tax cuts to billionaires?”. Some may think that that is entirely objective and legitimate polling. It does happen and becomes increasingly effective—needless to say, there is very effective push polling in relation to my own party. It would also deal with ordinary canvassing by telephone. All these things cost money but make a real difference in constituency campaigns and affect the outcomes of elections.

The groups that I have met—I am sure it would apply to others—look relieved when I suggest this amendment to them. It would make things simpler for those who are caught by the definition because, where telephone calls are being made or letters or leaflets sent to someone’s home, you would know it is a campaign targeted at that particular geographical area and deliberately trying to affect the outcome in that constituency. There can be no uncertainty about that. The amendment sticks to the vital policy intention to have a constituency limit but makes its operation much simpler. As I have said, I am pleased to note that the Electoral Commission, with which I have not agreed about everything, finds this a very helpful and practical solution to an otherwise rather tricky problem.

My noble friend Lord Greaves and I have different amendments, which get rid of the obscure reference to a percentage of national units and instead make clear, in the Bill, precisely what the pound sign applies to, rather than having a percentage figure. Again, that would be a simplification. There is a case of course for these limits to be lower than suggested, and the opportunity to hear that case is there in Amendments 170C and 170E. I am not sure whether they will receive much support in your Lordships’ Committee but the issue of the appropriate limit remains extremely important for the whole legitimacy and effectiveness of the Bill.

Amendment 170F would permit the limits to be changed later by statutory instrument. One of the campaigners we met said that he thought that the limits should only be changeable upwards in this way, to avoid any suggestion that voices could later be quashed by a quick fix. That is a fair suggestion and I hope that, when we come back on Report, we may decide that any such changes should be limited to upward changes. However, the principle that these limits may not be perfect is not a new idea and worth acknowledging with an order-making power. That would of course be a much more limited power than the power currently in the Bill to change the whole of Schedule 3 by statutory instrument, something that we will deal with later and which may raise the whole question of a Henry VIII power.

Amendment 170G sets out to acknowledge the clear difference between, on the one hand, a millionaire walking into a constituency to spend lots of money swaying the result in the direction that he favours and, on the other hand, a local group raising lots of money from small donations. That surely is different in principle and it would be very helpful if we could find a way of differentiating between the two. Our amendment here would allow for the local groups to spend more money than the millionaires, provided the money could be raised locally. For the provision to work, they would have to record all those donations—not just those below the present recording threshold—and declare them. That will be their choice but a local group might well be prepared to do just that.

Extra transparency and local fundraising would mean extra spending capacity. We should all recognise that idea as being legitimate, and we therefore wanted to float it at this stage. It introduces no extra complexity for those who keep to the normal constituency limit proposed in the Bill but gives flexibility to those who think that they could exceed it with a genuine, local, grass-roots campaign. The Government should endorse that principle, even if the amendment itself could be improved.

Our amendments in this group are designed to help make the constituency limit do what it is intended to do but without doing what it is not intended to do. Our approach avoids bogging people down needlessly in accounting for things that do not matter very much at a constituency level. It adds much needed clarity to the whole concept of a constituency limit and acknowledges the role of local campaigning and local fundraising. In exactly the same spirit as the noble and right reverend Lord’s commission, this is a practical package. It could be implemented and is workable, but it meets the extremely important objective of this legislation, which is to ensure that we still have proper controls over spending at the constituency level. I beg to move.

My Lords, I take seriously what the noble Lord, Lord Tyler, has said and what earlier on the noble Baroness, Lady Williams, said. Clearly, if there is a possibility of abuse, that must be guarded against. The commission takes that seriously. However, we must also take into account a number of other factors, not least that the Electoral Commission regards constituency limits as they are in the Bill at the moment as unworkable and unenforceable. It states:

“In our previous briefings on Part 2 of the Bill we have noted that except in extreme cases, the new year-long constituency controls may be unenforceable within the regulated period, given the difficulty of obtaining robust evidence to determine and sanction breaches”.

That seems to be a key point. If the Electoral Commission believes that these controls cannot be enforced, there must be something fundamentally wrong with the law.

It should also be noted that political parties’ national campaigning during the year before a UK general election is not subject to limits on spending at constituency level. Why is there one rule on this for political parties? Perhaps I can ask the Minister to reply to this. Why, when according to the Bill there is to be a limit on what third-party campaigners can spend, should the political parties have a rule that says that there is no limit on what they can spend in a particular constituency? Furthermore, PPERA did not contain the provision for constituency limits. We have heard a lot about the threat of abuse at constituency level, but there was no clear evidence of abuse at the 2010 general election.

The Electoral Commission states:

“The existing controls for constituency level campaigning are set out in separate rules under the Representation of the People Act 1983 (RPA)”.

These controls cover constituency campaigning by candidates who are standing for election and spending by non-party campaigners who campaign for and against those candidates, as, for example, in “vote for this candidate”. Earlier on the noble Baroness, Lady Mallalieu, made a point of this. Any potential abuses of the kind that the noble Lord, Lord Tyler, and the noble Baroness, Lady Williams, have pointed out are the responsibility of the police to investigate. The Electoral Commission does not have any enforcement powers in relation to these rules.

The main burden of the commission’s report, backed up by a number of vivid case examples, is that it would be impossible to comply with this law because a fair amount of campaigning crosses a number of different constituencies. For instance, the Save Lewisham Hospital campaign operates across three parliamentary constituencies. So far, the campaign has collected and spent around £36,000. The hospital serves a number of different constituencies. How on earth would the campaigning groups involved in the campaign allocate the different amounts of expenditure per particular constituency?

A similar problem arises in relation to Stop HS2. As well as the national organisation, there are 120 local action groups. In the Kenilworth and Southam constituency alone, there are 11 separate action groups. Stop HS2 goes through a whole range of different constituencies. How are the groups that are part of this campaign to allocate their expenditure to the different constituencies? Even if they were able to do that, how would the Electoral Commission be able to enforce it?

I shall not repeat other examples because of the shortage of time. They are all set out at the back of the report. One example relates to stopping climate change. We must take seriously what the noble Lord, Lord Tyler, has said. It may be possible for the Government to bring forward a very sharply focused amendment to deal with that problem. As it stands at the moment, for the reasons I have given, it would be difficult if not impossible for campaigning groups to comply with the law and the Electoral Commission would have great difficulty in enforcing it.

My Lords, I, too, intend to oppose the Question that Clause 28 stand part of the Bill. I shall be brief.

Clause 28 needs to come out altogether. First, it is written in gobbledegook. At Second Reading I took up some of the House’s time by reading out part of Clause 28. I recommend it to the noble Lord, Lord Tyler, for his insomnia. It is impossible for a criminal lawyer like me, not a charity lawyer or an electoral lawyer, to begin to understand it. It is inconceivable that any small charity or campaigning organisation without its own legal team would be able to look at it and understand it. They would be bound to have to seek expensive legal advice that would take money and staff away from the objects and the work that they were doing. Whatever else happens in relation to Clause 28, this present clause should be taken away and written in English.

Secondly, if the Government insist on having a clause of this nature, perhaps I may also point out, as has already been done by the noble and right reverend Lord, Lord Harries, that it is unworkable. It is impossible to divide some of the expenditure by campaigning organisations between constituencies. Where does it leave the rally that draws people from a number of different constituencies? Where does it leave the battle bus that drives around the streets and crosses some constituency boundary? How on earth does an organiser who is running a national campaign apportion the particular pieces of his time to the various constituencies that may or may not be covered?

Thirdly, it is unenforceable. The Electoral Commission, comprising the people who are meant to be doing that, has said so, as your Lordships have just been reminded. One can well imagine the avalanche of complaints that are likely to be made to the Electoral Commission during and after a campaign, especially if a result has been close. Its resources are now stretched beyond what it is being required to do. It is unlikely that it will receive adequate additional resources to help with the Bill. If it does, they will be inadequate for investigating and dealing with the process of investigation and adjudication of these complaints.

Should I interpret the noble Baroness’s remarks that she is supporting the very carefully targeted Amendment 170A that I moved? That would deal with all the uncertainty to which she understandably refers.

That would certainly be a much better step than what is included at present. I would say that it is absolutely unnecessary. If it is right that the spending limits are to be reduced, does that not provide one safeguard? I return to my old friend, the Representation of the People Act 1983, which in any event provides the safeguard that people are concerned does not exist now. For all those reasons, Clause 28 needs to be scrapped.

My Lords, I agree with the noble Baroness about the way in which this clause has been written. I thoroughly applauded her speech at Second Reading in which she drew out the extent to which this is incredibly complicated, even for someone with some arithmetical skills, which I do not possess, let alone any understanding of law by a non-lawyer. None the less there is a supremely important principle in this clause and my noble friend Lord Tyler drew it out perfectly. In many ways it is the heart of this Bill.

The fundamental issue is that spending by political parties is controlled because we do not want there to be a free-for-all spending-wise in this country in the way there is in America. Therefore, we have control of political parties’ spending. We have control at a national level and we have control in a regulated period; we can argue about the length of the regulated period but we have one. We have control at the constituency level. That control must be strong. Therefore, we are really arguing about what the level of control should be.

I am quite amazed that the commission of the noble and right reverend Lord, Lord Harries, said quite specifically that there should be no constituency limits on spending by third-party campaigners. That must be absolutely wrong in principle because they are not standing in the election. Why should they have an unlimited influence in a particular constituency as opposed to the people who have actually got the guts to stand for election and put their name, personality and fortune on the line in the hope of coming to Parliament? It must be wrong for them to be outbid financially by some third party, who is not willing to put their name and person up for election in the way the candidate has had the courage to do.

I hope that the noble and right reverend Lord will reflect on this. The idea that there should be no constituency limits is wrong in principle. Therefore, I think there should be a clause of this kind, although I would hope it would be very much better drafted than the one we have at the moment.

Secondly, the argument is put forward by the commission that any limits placed are unenforceable. Obviously, the commission is making the point that it is being asked to do a new task. Previously, the commission has looked post hoc at what has happened in a general election; here it is being asked to do it in real time, during the course of the election, to find out exactly what is going on and whether the system is being abused. That is a very difficult task and the commission is right to say that it is having tasks imposed on it that it has not done before and which therefore may well be very difficult to enforce, to the point of being unenforceable in some circumstances.

Those of us who have fought elections know that the existing limits on what parties can spend in elections are very often unenforceable in practice. As I know to my personal cost, parties find all sorts of devious ways around the amount that can be spent in a general election and it is very difficult to track them down. In that sense, the existing rules are unenforceable, but they do have a restraining effect. As a candidate in a general election, when I came to fight the election I knew that I had to get a little war chest together. The general assumption was that you had to try to get together about £10,000 to fight an election.

I will say in passing that most associations and local parties are extremely poor. Getting together £10,000 is quite hard to do. At the penultimate general election, when I was defending a majority of 269 against the Liberal Democrats, I reached £10,000 only by having a gift from the noble Lord, Lord Ashcroft, of £6,000; otherwise, I and the local party would have had to fork out. We are living in a poor world. Local parties do not have the resources of Oxfam and all those large organisations that want to home in on an election and put their view—as they rightly should, within proportionate limits—to the people who stand in elections.

Having constituency limits acts as a clear restraint on what parties think they can spend and what third parties think they can spend. Therefore, if there was a restraint of the kind the Government recommend, that would exercise a good influence on the whole electoral system.

The issue has been raised, in relation to the Save Lewisham Hospital campaign, that you cannot have a spending limit related to one constituency. There are three constituencies in Lewisham; of course you could have the expenditure divided between three constituencies. Some expenditure would not be allowed in a particular constituency. In Orpington, for example, there was always a huge banner, usually taped up by the Labour Party, in one main road in my constituency and it was never accounted for in the local expenses of the Labour Party in Orpington although it would actually influence people going round the M25 and other roads nearby. These things can be dealt with and there is no real difficulty in trying to apportion expenditure in the way that is described.

It is all perfectly possible, it is doable and it is essential if we are to have a proper democracy in this country. Indeed, I would argue that what the commission is proposing is actually anti-democratic.

I feel I ought to point out something that the commission made quite clear at the beginning of its report: that its recommendations were for the 2015 election only and that there should be a proper review post-2015. We had only six weeks to consult, despite the recommendation of a lot of bodies, including ourselves, that there should have been a proper three-month or six-month review. In the six weeks, we could not find a workable solution to this, so for the 2015 election our recommendation was that we should not have limits. We could not get our minds round this to find one that is really workable. The Government may be able to do this—we will just have to see—and they may accept the amendment in the name of the noble Lord, Lord Tyler. In defence of the commission, I point out that this was only for the interim because we had such a short time to consult.

I understand what the noble and right reverend Lord is saying and I accept that. None the less, I want him to understand that, in running a proper democracy, at a constituency level this is a very important issue.

I know that the noble Lord speaks in a personal capacity but he has also the very important, practical experience of being a member of the Electoral Commission. For the avoidance of doubt, I will read again the specific recommendation of the Electoral Commission on my Amendment 170A, which deals with this very important practical point of being able to tie down where precisely a campaign is aiming its efforts. The commission says:

“In principle we see potential benefits in defining the scope of activity covered by the constituency controls more specifically than in Part 2 of the Bill generally. For example, costs relating to material sent to specific addresses can be identified and evidenced with some confidence”,

which will deal with precisely the circumstances to which the noble Lord is referring. I hope, therefore, that there may be support from the Government for what I think is a very practical approach to this otherwise quite tricky problem.

I hear what my noble friend says and I think he will also recognise that the Electoral Commission made the point of practicality—whether this really is a practical way forward. Whether it is workable in practice has to be the test.

As the noble and right reverend Lord, Lord Harries, knows, I have supported quite a few of the recommendations of his commission, which was a very thoughtful and helpful exercise. But on this point, I am very certain that the Government must hold their ground for the sake of democracy in this country.

My Lords, because constituency-based limits seem to be even more inappropriate than some of the other sanctions we have been discussing when related to non-party charities and other organisations working in the criminal justice system, as the noble and right reverend Lord pointed out—and I have referred to these organisations already—I would like to preface my contention that Clause 28, which was so admirably described by the noble Baroness, Lady Mallalieu, should not stand part of the Bill in its present form.

On Monday, we took almost six and a half hours to complete four groups of amendments in Committee, which not only confirmed what many other noble Lords have felt since it appeared—namely, that this is a thoroughly bad Bill—but caused me to reflect on its actual aim. My reflections were stimulated by the remarks of the noble Baroness, Lady Williams, who suggested that its purpose was to prevent money taking over politics as it is doing in the United States.

On rereading Part 1, which is all about professional or consultant lobbyists, the scales fell from my eyes. The noble Baroness’s description of young people being trained to lobby by the Tea Party called to mind a conversation on the steps of Washington Cathedral one Sunday in September 1973 when I was accompanying my then boss, the Chief of the General Staff, to Matins during an official visit to the American army. A delightful elderly ex-ambassador to South Vietnam whom we met earlier in the visit said to him, “The trouble with this country is that it’s governed by whizz-kids, and the trouble with whizz-kids is that they haven’t got time to listen. You see, I’d told them that the Watergate building was in the Foggy Bottom district of Washington, and if they’d only called it the Foggy Bottom incident nobody would have taken them seriously”.

Then it dawned on me. Looking around Whitehall, I am struck by the numbers of whizz-kids advising every ministerial office. I understand that this is soon to be increased by 10 more per Secretary of State. They are not civil servants but whizz-kids: clever young people employed because they are uninhibited by practical experience. They are not afraid to put forward blue-skies theories, many of which I suspect that the more experienced Ministers would confine to the waste-paper basket.

The Bill is nothing more than a whizz-kid panic attack, brought on by the spectre of hordes of Tea Party-trained consultants flooding across the Atlantic and rotting up the 2015 election. Having panicked, they then tried to prove their virility by dreaming up preventive measures, which in their headlong rush they tried to process without submitting them to the normal procedures which, as we know, rubbished them once they saw them. This House too was swept along by this rush, until on Monday the voice of experience had a chance to make itself heard. I hope that on looking through Hansard their bosses will have realised that something is wrong and the whizz-kids need to be told to calm down. These hordes are not going to stream across the Atlantic, and even if they did we already have mechanisms in place that can cope with them.

Our political system, including our electoral system, may be at risk, in which case we may need to take remedial action. However, let us watch what happens in the 2015 election to see what action may need to be taken. Having made so much noise about the big society, the very last thing the Government ought to do is risk alienating voters by threatening the contribution of the voluntary sector, which is one the UK’s jewels. Rather than risk doing any more damage to ourselves and our reputation, surely we should now withdraw the Bill until we know whether we need such an instrument after 2015. I wonder whether any other noble Lords share the pious hopes of an old general.

I turn now to Clause 28. Again, we have had no examples from the Government of where disproportionate expenditure in one constituency has had an undue influence on the outcome of an election. Non-party organisations and charities, particularly those which work in the criminal justice system, are not organised into political constituencies. I cannot imagine how it is possible to divide their activities and apportion them to what is going on in constituencies, as my noble and right reverend friend pointed out. For example, consider the Shannon Trust, which provides the Toe by Toe reading programme in every prison in the country. Would it have to report how it is campaigning for funds in each of the constituencies which are involved in an election?

As has been pointed out, the Electoral Commission said that controls may be unenforceable within the regulated period, given the difficulty of obtaining robust evidence to determine and sanction breaches. If all of that is so abundantly clear to anyone looking at the whole system, why on earth are we presented with what the noble Baroness, Lady Mallalieu, so rightly called gobbledegook which I defy anyone to understand?

My Lords, I rise as a fairly junior judge, and I also have pious hopes about the future of the Bill. My name is among those who oppose Clause 28 standing part of the Bill. I associate myself with the remarks of the noble Baroness, Lady Mallalieu, my noble and right reverend friend Lord Harries of Pentregarth and my noble friend Lord Ramsbotham. I will not repeat what they have said. Much of what I wanted to say has already been said, but I want to concentrate on two things.

The first thing I want to highlight is the concern about the enforceability of this provision by the Electoral Commission. I heard what was said about that by the noble Lord, Lord Horam, but the commission has expressed concern. Indeed, I raised this issue on Second Reading. I sought confirmation from the Minister that the Government expect the commission’s regulatory regime to continue to focus primarily upon retrospective action, as at present, and that the use of stop notices would be confined to cases where there is a significant risk of seriously damaging public confidence in the statutory controls. I did not receive a reply. I wonder if the noble and learned Lord the Advocate-General is now able to answer that question.

I noted that the noble Lord, Lord Horam, seemed to suggest that that might not be the position and that there might be an expectation of contemporaneous enforcement. If there is to be contemporaneous enforcement, the challenge for the commission is huge, because it will have to monitor every constituency in the United Kingdom to see what is going on. Clearly, it will have to have the resources to do that and, in appropriate cases, it may then have to use stop notices even where risk to the system is not an issue. If that is not the expectation and there is not to be contemporaneous enforcement but regulation after the event, as it were, then one calls into question the enforceability of these provisions. I accept, of course, that as was said by the noble Lord, Lord Horam, even checks after the event might impose some restraint on individuals, but it would not be an effective enforcement of the clause.

The other matter I wanted to raise was the point made by my noble and right reverend friend Lord Harries about the fact that political parties do not have to account in this way for individual constituencies. At the moment political parties and third parties do target marginal constituencies, particularly constituencies where they think that their resources will be most effective. That is unconstrained on the part of political parties, except within the overall expenses limit. After the Bill becomes law, if Clause 28 remains political parties will still be able to act in this way, but third parties will not. What is the reason for that discrimination against registered third parties? Apart from their being prevented from operating in the same way as political parties, there is the added concern that they will be obliged to return a note of expenditure in each constituency during the regulated period of a year before the election, if the expenditure exceeds £5,850. Why was this figure given rather than £9,750, which is fixed for the total period of a year?

Whatever the reason for that, it is clear that the administrative burden on third parties occasioned by this provision will be significant. When it is taken along with the other restrictions imposed upon them by the clauses that we have already debated, the impression is that we are discriminating against third parties. There is a positive disincentive to them to become engaged in the political process in the crucial period immediately before an election. The public may well consider that this clause is simply another illustration of their belief that politicians consider that politics is for professional politicians and that the general public will be discouraged as far as possible from participating in politics. That is the wish of politicians. Their only wish is that the public’s only participation should be to cast their vote and otherwise to remain silent. In the absence of sound reasons for imposing this additional restriction solely on recognised third parties, I invite the Government to withdraw this clause.

My Lords, we have talked about taking money out of politics. If I heard the noble Lord, Lord Horam, correctly, he received a donation from the noble Lord, Lord Ashcroft, of £6,000. It is Labour Party policy that donations should be limited to £5,000, so perhaps the most important thing that we could do to get money out of politics—not under the Bill—would be for him and other members of his party to sign up to a maximum donation of £5,000.

Whatever the intention of constituency limits, we have heard that they are unworkable for campaigning organisations and certainly unenforceable by the Electoral Commission. As the noble and right reverend Lord, Lord Harries, and the noble and learned Lord, Lord Hardie, said, political parties do not have these rules for national campaigning, let alone for a whole 12-month period. They do not have to account for staff costs nor try to parcel up their national spending by ward or constituency boundaries. However, political parties at least have a very good reason to organise by constituency; campaigning organisations do not. They campaign against wind farms, for a new zebra crossing, against payday lenders, or in favour of badgers. As we know, badgers move, as does HS2, which will run through hills and dales, counties and boroughs. Such campaigning does not fall into neat little constituency boundaries, which of course the Government anyway want to change for every election under their new law.

The new limit is £9,750 per constituency spread over a full year. That must cover costs of staff, hire of halls, adverts for meetings, posters and publicity. It will cause difficulty for small organisations which run a campaign limited to a geographical area but also for national campaigns with a federated structure. The boundaries for national and even local organisations rarely follow the constituency boundaries that we in politics know well.

Those organisations will need to estimate whether their campaigning costs relate to activity in particular constituencies and ensure that their planned spending will then stay within the new limit for each activity in each constituency. That will be problematic. First, they will have to find what the constituencies are. Many of them will not know—they are not political anoraks and they do not know the boundaries of those constituencies. They will then have to see which bit of spending lies where. It will be different for local organisations, but it will also be, as has been mentioned, virtually unenforceable within the time limit of this election by the Electoral Commission, particularly where breaches occur in the last few weeks of a campaign. It will require real-time monitoring; it will require the commission to respond to allegations across 650 constituencies during a whole 12-month period—that is, starting in May. I defy anyone who, like me, has run an organisation to be up and able to do by then something of that nature.

As has been said, this clause is incomprehensible, unworkable and unnecessary. The Conservatives, of course, have form on Clause 28. I suggest that they get rid of this one so that they do not have the same trouble as they did with the last one.

My Lords, it was clear from many of our previous debates that the issue of constituency limits had attracted considerable discussion, not to say controversy. The fundamental point here, which was very well made by my noble friends Lord Tyler and Lord Horam, is that it would be wrong if a third party could choose to direct its entire national spending limit at only one small part of the UK, thereby focusing the full force of the considerable spending available to it on that very small part. It would be disproportionate if that was one constituency. That point was articulated. It would be a travesty of the democratic process if so much was focused on one constituency.

To prevent such occurrences, the Bill introduces what I admit is a new provision whereby third parties will be permitted to spend only a certain proportion of their controlled expenditure in individual constituencies. Clause 28(6) limits per constituency spending to 0.05% of the maximum campaign expenditure limits applied to political parties. This amounts to £9,750. The limit applies for the duration of the regulated period for a UK parliamentary general election.

It is proposed that a third party’s expenditure would be wholly attributed to a constituency provided that the expenditure had “no significant effect” in any other constituency. It is of course possible that expenditure in a local area may be attributed to a number of constituencies—for example, in Lewisham, where I think that it would be relatively straightforward to see three constituencies.

I accept that if someone was handing out leaflets in Princes Street in Edinburgh, it would be very difficult to say that that was focused on a constituency—which I think used to be Edinburgh Central, but these boundary changes happen so often—and was not having an effect elsewhere. If anyone was handing out leaflets in the constituency which I formerly had the privilege of representing, in Kirkwall or in Lerwick, it would be almost impossible to suggest that it was intended to have an effect on any other constituency, as it would be focused in the one place. The concerns that have been expressed about how you identify boundaries will often be easier to determine with regard to specific case examples.

In response to a point that the noble Baroness, Lady Mallalieu, raised on a number of occasions, I should stress that the limits on constituency spending do not remove or replace the important existing controls of the Representation of the People Act 1983. These rules are long-standing and stipulate that third parties campaigning for a candidate or candidates in a particular constituency—which includes negative campaigning against others—may spend only up to £500. Clause 34 would raise this amount to £700. While introducing a limited requirement to keep a record of such expenditure, the Bill does not otherwise affect the provisions of the Representation of the People Act. Third parties campaigning in local campaigns would be well advised to heed the strictures of the Act. First and foremost, if a particular organisation or group intends to go into a single constituency to promote a particular candidate, or to attack a particular candidate, it would be well advised to have regard to the provisions of the Representation of the People Act.

Will my noble friend confirm that that applies to the post-dissolution period in a constituency and not to the 12 months leading up to a poll?

My noble friend is absolutely right, but it is important that we do not lose sight of that provision.

There are other types of campaigning that are already regulated under PPERA and that we consider should be subject to the national third-party controlled expenditure campaigning limits and the constituency limits which this clause introduces: first, campaigning for or against a particular party; and, secondly, when a campaign is intended, or may reasonably be regarded as being intended, to support groups of candidates because they are of a particular type or because they support particular policies or hold particular views. For instance, if a third party campaigns with the message “vote for those candidates who support green taxes”, this would be spending regulated under PPERA and subject to the national third-party controlled expenditure campaigning limits and the proposed constituency limits. For both types of campaigning, a third party could choose to direct this entire national spending limit at only a small number of constituencies. That is why we consider this clause to be necessary.

A number of amendments have been proposed. The noble and right reverend Lord, Lord Harries of Pentregarth, has proposed Amendment 170, which would remove constituency limits altogether. I accept his point that this would be for the 2015 election, and that we must look at it in that context, but I think that there is concern that a huge loophole could be created.

Some have said that there was no evidence of a problem in 2010—or, as the noble Lord, Lord Ramsbotham, said, that there has been no example of a constituency being completely swayed or influenced by third party expenditure. But how many times do Ministers receive strictures because they did not anticipate a problem? If this were not in place, what would happen after the 2015 election if the kind of event to which the noble Lord refers had taken place in a constituency and there was felt to be a considerable travesty? I rather imagine that some would say, “Ministers knew they had a Bill going through Parliament. Why did they not do something about it at the time?”. Is it the case that we always have to wait for a problem or travesty to arise before we take action?

The constituency limits will be enforced by the Electoral Commission. I have heard the concerns that have been expressed about that. The Government have been in many discussions with the regulator on this issue, and we believe that the commission can regulate spending in constituencies in the same manner as it regulates national spending. The noble and learned Lord, Lord Hardie, asked whether an Electoral Commission enforcement officer would be needed in each constituency. That is certainly not what is anticipated.

I did not say that. I was not anticipating 650 enforcement officers. I was suggesting that if there was to be contemporaneous enforcement of this provision, it would be necessary to monitor each of the 650 constituencies, and for the appropriate enforcement officer, who might be covering several constituencies, to take action.

I accept that clarification and apologise if I misrepresented the noble and learned Lord. As I think my noble friend Lord Horam indicated, the current political parties expenditure rules are not always the easiest to enforce. Very often the best enforcers are the opposition—because, as those of us who have had active experience of political campaigns know, if there is any hint that somewhere or other there has been jiggery-pokery or money spent that should not have been, the candidates on the receiving end will be very quick to alert the regulatory authorities to what has gone on.

The same applies to the question that was raised, quite fairly, about how expenditure could be attributed to a constituency. We believe that it would be in line with the current guidance that attributes spending between different parts of the United Kingdom. Where spending in constituency A has a minor effect in constituency B, the entire spending amount should be allocated to the constituency that it was aimed at. For example, if a third party advertised in a local paper in constituency A that just happened to be distributed in a small part of constituency B, the entire amount should be allocated to constituency A.

That was really brought home to me when the noble and right reverend Lord, Lord Harries, asked, “How would we allocate the timing of the activities of a battle bus?”. I say this with no criticism whatever, but those who have not been involved in party election campaigning do not understand the difficulties that are sometimes experienced by those who have to act as election agents in allocating and working out expenditure returns for those who are involved in it. The noble Baroness wishes to intervene but I am just going to give an example. In 1979, my noble friend Lord Steel of Aikwood, then David Steel, the leader of the Liberal Party, probably introduced the battle bus to British politics. Immediately after that election in May 1979, I was adopted as the Liberal European candidate for the south of Scotland, which included the constituency of Roxburgh, Selkirk and Peebles. I had as my election agent the agent for Roxburgh, Selkirk and Peebles, who had been David Steel’s election agent in the general election that immediately preceded it. He went by the wonderful name of Riddle Dumble, and, as my election agent, he told me, “I’ve got this nightmare of trying to do David’s election expenses return; I have to sit down and allocate the amount of time that his battle bus was in the constituency, and what part of it represented constituency campaigning and what was part of the national campaign”. This is not something that is new.

We are professionals in a party. It is our job to run elections. That is the whole point that we are making. It is core to us; it is what we are trained for. I ran European elections. We know about it; we train our agents; we have the systems and have our computers set up for that; and we know ward boundaries and constituency boundaries. Here we are talking about different organisations that are here to help people with a drink problem, people in poverty and people who are going to be affected by the bedroom tax. They do not get trained in the way that we do.

I hear what the noble Baroness says, but if we are dealing with a situation where an organisation is trying to intervene in a constituency for the purpose of promoting the electoral advantage of one particular party, one particular candidate or a series of candidates in an area, then it is not unreasonable that there might be some responsibilities that go with that, particularly with the kind of substantial volume of money that we are talking about being spent in one or a number of focused geographical areas. No one is asking them to account for the work that they are doing in trying to tackle mental health issues or alcohol problem issues—that does not arise. They are caught by this only if the amount that they are spending in one particular constituency or group of constituencies is caught by these provisions, in which case there might just be a responsibility that goes with that. The point that I am making is that there is nothing new about that in terms of its enforceability. It is something that people, not least the Electoral Commission, have been grappling with for some time.

My noble friend Lord Tyler tabled a series of amendments that he hoped would add clarity to the provision. The word “clarity” is something that the noble Baroness, Lady Mallalieu, and the noble Lord, Lord Ramsbotham, would certainly echo. My noble friend quoted the Electoral Commission with regard to his Amendment 170A, which would mean that election materials—leaflets, mailshots, adverts and so on that were specifically addressed to or delivered to households in a constituency, and unsolicited telephone calls to households—counted towards constituency limits. The main issue that I have with this amendment is that there could be key activities, such as rallies or events that were deliberately focused on an area, which would not be regulated, and it would not restrict material from otherwise being distributed or displayed. As I said, leaflets being handed out in the middle of George Square in Glasgow are different from leaflets being handed out in the marketplace of Thurso, for example, in the Caithness, Sutherland and Easter Ross constituency, which could not be said to be influencing any other constituency. However, I hear what numerous contributors have said in this debate about simplification, and there is an obligation on us to look at the provisions, without giving any commitment, to see if there is the possibility of looking generally at the question of simplification.

My noble friend also tabled Amendments 170B and 170D, altering constituency limits so that the figure was £10,000 for the whole of the regulated period and £5,000 for the post-Dissolution period. He has already pointed out that RPA kicks in for the post-Dissolution period. As for the proposal that there should be an opportunity for the Secretary of State to amend the constituency limits by order, there is already provision in Clause 30 for the Secretary State to amend constituency limits by order on the recommendation of the Electoral Commission. I hope that that covers his concerns, but no doubt if he thinks that they do not meet what he was proposing, he will indicate that to me.

His final amendment was one that I thought had much to commend it in terms of, as he said, trying to encourage political engagement. Amendment 170G would allow the constituency limit to be exceeded to a maximum of £15,000, or £10,000 in the post-Dissolution period, if a third party’s controlled expenditure was being funded by donations of less than £250 from donors within a parliamentary constituency. It would also allow a third party to spend up to 50% more than the national limit that would otherwise apply.

Because amounts below £500 are not currently considered to be donations under PPERA, the amendment would require a third party to carry out permissibility checks and record all donations, however small. This would be a fundamental change to the PPERA donation rules and would be likely to involve unmanageable compliance. Given the concerns that have been expressed about compliance and regulatory burdens, that factor would have to be borne in mind. It would increase the burden and would also risk having the opposite effect to what was intended. A large third party organisation with members and donors across the country may be able to identify sufficient donors in each constituency to give itself a disproportionate advantage, whereas a small organisation funded by very small donations would not be able to benefit in the same way.

I referred earlier to the Representation of the People Act. We are also concerned that linking expenditure to local donations in constituencies in this way could quite easily risk confusion with and undermine RPA rules or third party candidate campaigns, and I know that my noble friend would not wish to have such confusion between the two regimes. I hope that noble Lords agree that there is a need for constituency limits and that these can be properly enforced. I urge my noble friend to withdraw his amendment.

My Lords, I will respond very briefly to the debate. I think my noble friend the Minister will accept that there is real concern about making sure that we have—if we are going to have—applicable, effective and manageable constituency limits. Therefore, I am sure that we will return to this on Report. If we do not and were to remove the whole of Clause 28, I am sure that it would be put back, in one form or another, by our colleagues in the other place, who have a considerable interest in the extent to which their constituencies are subjected to considerable investment—

My Lords, perhaps I may point out that it has already been through the other place and it was not thus amended.

The very fact that it has come to us is making the point for me. I think that the other place would consider it essential to retain some constituency limits. However, I accept that there are concerns about workability. I hope my amendments will improve the extent to which they will be manageable and enforceable, but in the mean time I am happy to withdraw the amendment.

Amendment 170A withdrawn.

Amendments 170B to 170F not moved.

Clause 28 agreed.

Amendment 170G not moved.

House resumed. Committee to begin again not before 3.41 pm.