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European Union Referendum Bill

Volume 765: debated on Wednesday 4 November 2015

Committee (3rd Day)

Relevant documents: 5th Report from the Constitution Committee, 9th Report from the Delegated Powers Committee

Clause 3 agreed.

Amendment 33

Moved by

33: Schedule 1, page 8, line 5, leave out “Schedule” and insert “Act”

My Lords, I shall speak also to Amendments 41 and 42, 44, 47 to 49 and 62, which are all in my name. They all relate to the donations and loans controls that will apply to campaigners at the referendum.

Amendment 33 is a technical amendment which, alongside Amendments 47 and 62, ensures that the Bill will contain one definition of “referendum period” rather than multiple, identical definitions. These minor amendments are necessary as a result of a more substantive amendment, Amendment 48.

Amendment 48 addresses an issue with the rules relating to loans and other financial transactions that benefit political parties that register as permitted participants at the referendum. To keep matters straightforward, I will henceforth refer to these transactions simply as loans.

Political parties are eligible to become permitted participants at referendums under the Political Parties, Elections and Referendums Act 2000—PPERA. If they do, they will be subject to the same controls on referendum spending as apply to other permitted participants, but the major parties will not be subject to the same controls on donations and loans. This is simply because political parties other than minor parties are already subject to ongoing controls on donations and loans under PPERA. The exclusion of these political parties from the donation and loan rules at referendums is not a reflection of their having a different status to other permitted participants at a referendum. It is merely an administrative measure to avoid double counting and excessive compliance burdens, given their ongoing requirements in relation to donations and loans.

Under PPERA, the list of those eligible to make donations or loans to political parties is the same as the list of those who are eligible donors and lenders in relation to permitted participants. However, for the EU referendum, the Bill adds to the list of those eligible to make donations to permitted participants. It does this at the recommendation of the Electoral Commission, to bring the list into line with the list of non-party campaigners who are eligible to register under PPERA for election purposes, as amended by the Transparency of Lobbying Act. The list has also been extended to take account of the inclusion of Gibraltar in the referendum. For example, Gibraltar electors will be eligible to make donations to permitted participants, as will royal chartered bodies and Scottish partnerships.

The Bill also introduces controls on loans to permitted participants. The list of eligible lenders is the same as that for eligible donors for the purpose of the referendum. As political parties are regulated separately, it is necessary similarly to extend the list of eligible donors and lenders to political parties that register as permitted participants. An amendment made in the other place effected this measure in relation to donations. This now forms paragraph 22 of Schedule 1. Amendment 48 completes this work by extending the eligibility to make loans to political parties acting as permitted participants to the newly added individuals and bodies. As with the rules for donations to political parties, this eligibility will be time limited and will apply only during the referendum period.

This is about having a level playing field in the run-up to the referendum. It must be right that political parties that register to campaign be able to accept donations and loans from the same sources that are available to other permitted participants.

Amendment 48 contains an additional control to prevent the terms of a loan agreement allowed under it being varied to increase the value of the loan. This aims to prevent political parties using loans entered into as a permitted participant as a means of borrowing more money after the referendum, which they would not normally be able to receive in their capacity as a political party under the ongoing party funding rules.

Amendment 42 relates to the changes made through Amendment 48, which I have just spoken to, and the similar amendment made in the other place in relation to donations to political parties. These ensure that the rules on who can donate and lend money to political parties that register as permitted participants are the same as for all other permitted participants. In effect, however, this means that during the referendum period, political parties that register as permitted participants will be able to receive funding from otherwise ineligible sources.

Noble Lords will appreciate the risk that any money donated or loaned to political parties by the newly added individuals or bodies could be used for wider political purposes, rather than for referendum purposes. For this reason, Amendment 42 adds a safeguard. It prevents a political party accepting funding from the newly added categories of eligible donors or lenders that would, in aggregate, exceed the party’s spending limit for the referendum. This follows the existing approach taken in PPERA for UK political parties that intend to contest European parliamentary elections in the South West Region, which includes Gibraltar. Amendment 42 will therefore help to preserve the integrity of the existing party funding rules through introducing proportionate, practical and sensible controls.

Amendment 49 relates to the regulations controlling who has access to the register of electors in England and Wales, Scotland and Northern Ireland. The relevant regulations control who can access the register and the purposes for which they can use it. These controls are necessary to ensure that people can access information in the register that they need to comply with election and referendum regulations, whilst ensuring that electoral data cannot be misused. It is a criminal offence to use information in the register for a purpose other than that specified in the regulations. This amendment will ensure that those who register as permitted participants for the EU referendum will have access to the electoral registers in England and Wales, Scotland and Northern Ireland for the purposes of complying with referendum donations and loans rules. Among those eligible to donate or lend to permitted participants are individuals registered on a UK or Gibraltar register. Permitted participants therefore need access to the registers to confirm a donor’s eligibility. The Government of Gibraltar will be enacting similar provisions enabling access to the Gibraltar register.

Those amendments are technical, but I now turn to those that are perhaps even more technical. Amendment 41 ensures that, during the referendum period, the rules for bequests from Gibraltar electors to UK political parties that register as permitted participants are the same as for bequests from UK electors. Amendment 44 corrects some incorrect cross-references in the Political Parties, Elections and Referendums Act 2000 relating to the controls on donations that apply to permitted participants. This amendment has no effect on the policy that applies to donations to permitted participants. It will ensure that the policy is implemented properly and that campaigners are certain how they are expected to comply with the donations rules. I beg to move.

My Lords, I ask the Minister to address one very simple point. She referred to the advice of the Electoral Commission in relation to Amendment 48. I am more concerned with Amendment 49, which is extremely important to all those who are going to be involved in this exercise. She will be only too well aware that, during the debate on Tuesday evening, various Ministers were extremely effective in rubbishing the advice of the Electoral Commission. Would I be right in thinking that, on this issue, they have taken the advice of the commission? This will be extremely important for all those involved in this exercise, and Amendment 49, on the face of it, is actually quite difficult to understand. I hope she can give your Lordships’ House that reassurance.

My Lords, indeed I can. The amendment to which the noble Lord, Lord Tyler, refers is a matter of access to the register. I can give an assurance that we have taken full account of the advice provided by the Electoral Commission.

The Minister was relatively explicit about this, but I have a question in relation to Amendment 49 and the operation of the requirement to check registers in Gibraltar. I hear what she said about this being passed through the appropriate parliamentary procedures in Gibraltar, but it is a bit unique that we have another Government doing something. Of course, compliance with donations will require political parties to check properly. I wanted to be absolutely certain that we will be properly advised as to when that approval is given.

My Lords, that is a very reasonable point to make. As I mentioned earlier, with regard to Amendment 49, it is a matter on which the Gibraltar Government will bring forward legislation —not only in respect of this but on the wider issues of Gibraltar being part of the referendum franchise. I will happily undertake to inform the noble Lord by letter when that legislation goes through, and I shall pop it to other noble Lords who have taken an interest.

My Lords, I had never realised before this Bill came along how important Gibraltar was, and I am impressed by the number of references to it in our amendments today, as in earlier days. I once spent an entire afternoon in Gibraltar and felt that I had got to know it rather well. There are some 22,000 voters in Gibraltar, so it is very good that we pay so much attention to them.

Amendment 33 agreed.

Amendment 34

Moved by

34: Schedule 1, page 12, line 8, at end insert—

“Designation of organisation for only one of the possible outcomesSection 108 of the 2000 Act (assistance for designated organisations) has effect for the purposes of the referendum as if—

(a) at the end of subsection (2)(a), for “but” there were substituted “or”; and(b) for subsection (2)(b) there were substituted—“(b) may designate a permitted participant in relation to only one of the possible outcomes.””

My Lords, I rise to move this highly technical amendment. Other Members of the House may have as much difficulty as I do in understanding the precise wording. As very often is the case when we are working with reference to other bits of legislation, it is a bit abstruse. However, rather than subject the House to yet another lengthy dissertation from myself, I shall read from the Constitution Committee’s report on this point. The committee said that the 2000 Act,

“provides for a designated organisation to be appointed by the Electoral Commission as a lead campaign group for each side of the referendum debate. It does not allow the Electoral Commission to designate one organisation only; for there to be any designated organisations in a referendum campaign at least one from each side must apply … This arguably allows one side in a campaign to ‘game’ the system. If they are well funded but do not want the other campaign to receive the financial and other advantages of designation, then they simply fail to apply for designation. Notably, there was no designation in the Welsh referendum in 2011 because the Electoral Commission took the view that there were no lead campaigners that met the statutory test of adequately representing the ‘No’ side. The danger of gaming was also raised in the context of the Scottish independence referendum. The Scottish Independence Referendum Act 2013 attempted to overcome this potential problem by allowing for the designation of one side only, although in the end two campaigns did indeed apply for recognition … Whilst we consider it likely that there will indeed be applications for designation by each side, the House may wish to consider whether the Bill should be amended to avoid a situation where one side could, in effect, prevent the lead campaign group on the other side from being designated”—

and, of course, from getting funds.

My amendment simply uses the wording of the amendment in the Scottish Act, which the Government agreed to put into the Scottish Act; it is replicated here, I hope in the correct place and the correct way, to have exactly the same effect as took place in Scotland.

It will not have escaped your Lordships’ notice that it never had to be used in Scotland. That is the purpose of moving this amendment. If it is accepted by the Government and put on the face of the Bill, there will not be a problem, because the certainty that one side can get itself designated even if the other side does not, and can therefore be a recipient of funds, will mean that the other side has no interest whatever in gaming the system. So I hope that this can be discussed on a totally technical, non-political basis, because I think that the Bill will be improved by the inclusion of this provision—and once we have included it, we can just forget all about it.

My Lords, I will speak to Amendment 37 in my name and that of the noble Lord, Lord Blencathra, and also to say how much I support the amendment just proposed by the noble Lord. I think that this might be a first in consideration of this Bill, but I think that it is a very sensible proposal.

Amendment 37 is following the same theme, which is ensuring that there is fairness in the conduct of the campaign. I was rather shocked this morning to read Hansard from the other place, where Mr Chope asked the Deputy Leader of the House of Commons to,

“confirm that the real reason why three independently minded former Ministers are being purged”,

from the Parliamentary Assembly of the Council of Europe,

“is because we voted in favour of a free and fair EU referendum with a strict 28-day purdah period, as recommended by the Council of Europe’s Venice Commission and our Electoral Commission?”.—[Official Report, Commons, 3/11/15; col. 887.]

I do not want to get involved in that particular row, except to say that Christopher Chope, Sir Edward Leigh and Cheryl Gillan are three very distinguished former Ministers, and I am very shocked that they should be removed from the Council of Europe, and even more shocked that it should be suggested that that is the reason for their removal.

I emphasise this point because, whatever the outcome of the referendum, it is important that at the end of it people feel that the Government did not abuse their position—whatever their position turns out to be—and that the campaign was conducted in a fair and balanced way. This, presumably, is why we have the Political Parties, Elections and Referendums Act 2000.

My amendment seeks to remove from political parties their ability, which arises from the 2000 Act, to spend money on the campaign itself. I thought that the whole point of having an Electoral Commission—which, incidentally, costs half the cost of the entire Royal Family—was to ensure that we had fair and balanced conduct of elections and referenda. That is what I thought it was about. I thought the whole purpose in having a designated campaign on each side with limitations on their expenses was to ensure fairness. But what do I find? I find that the Government have brought into the Bill the ability of the political parties to spend money in addition to the designated campaigns. In the case of the designated “in” campaign, it can spend £7 million; in the case of the “out” campaign, it can spend £7 million. That is fair enough; but then on the inside, the Labour Party can spend £7 million; the Liberal Democrats can spend £3 million; the Greens can spend £700,000 and the CBI and other organisations can spend £700,000.

The Conservatives have said that they will remain neutral—and it is very considerably to the credit of the Conservative board that it took that decision.

Did I not hear the noble Lord say that he thinks the amendment proposed by the noble Lord, Lord Hannay, is fair and reasonable because it is not right that people game certain situations? Political parties have a right to campaign on issues that they feel united about and on which they have had support from the electorate. If there is a problem with the Conservative Party, I do not see why the noble Lord should take that view and extend it to other political parties.

I thought the leader of the Labour Party was a certain Jeremy Corbyn, who wished to leave the European Union, but perhaps I am misinformed. Perhaps he has changed his position. The noble Lord knows perfectly well—

What is not true: that Jeremy Corbyn is not leader of the Labour Party or that Jeremy Corbyn was not in favour of leaving the European Union? I will give way to the noble Lord if he tells me which statement is not true.

The Labour Party’s policy is perfectly clear. The problem we have in this debate is that the Conservative Party does not have a clear policy. I do not see why the noble Lord should impose, through his amendment, his problems on to other political parties, including the Scottish nationalists and other major parties.

The noble Lord is suffering from the disadvantage of not having listened to what I am going to say. Perhaps when I have said it, he might want to come back on that point. I am simply pointing out that all these political parties have the ability to spend money in addition to the designated campaigns. If you add that up as it is set out in the Bill, those who wish us to remain inside the European Union will be able to spend £25.5 million and those who wish us to leave, together with the political parties—because UKIP will be able to spend £4 million—will be able to spend £11 million. That seems to me to be a tad unbalanced.

As the noble Lord knows, all political parties have people with different views on this matter. That is why we need to have a designated campaign, so that people of all political parties and persuasions can join together and make their case, whatever it is. This Bill, which raises the limits, makes the position even more unfair. Before the Bill, under the rules set out under the 2000 Act, the “in” campaign could have spent £20 million and the “out” campaign £10 million: twice as much for those who wish to maintain the status quo. As a result of this Bill, the figures are £25.4 million and £11 million —2.3 times as much. That simply is not fair. At the end of the day, as we know from American elections and elsewhere, the ability to spend money can have a marked effect on the result. If the campaign to stay in is successful, the last thing we want is people arguing that the referendum result was bought, that it was unfair and that it was led by big business and big money. I am surprised that the Labour Party, of all parties, is seeking to defend this position.

It is tempting to come back by asking what happened in the 2015 general election. Who had the most money? Do we call that into question? Who paid for it? I know exactly how much the unions gave the Labour Party, and I know how that money was collected. The corporate hedge funds gave money to the Conservative Party and enabled it to outspend every other party. Does the noble Lord not feel that that was unfair?

My Lords, I know the noble Lord has never stood for election, so perhaps he is unfamiliar with this, but we have strict rules governing how much the parties can spend in general election campaigns. They are designed to ensure that we have fairness. What I am complaining about is that the rules in the Bill give an unfair and disproportionate advantage, and that the amendment to the Political Parties, Elections and Referendums Act makes that even worse. That seems completely unfair, which is why I suggest that we reduce the figures that can be spent by the various political parties. In the 2000 Act, that is done as a percentage of the vote. Originally, it was £5 million if a party exceeded 30% of the vote, £4 million if it exceeded 20% but not 30%, £3 million if it got 10%, £2 million if it got 5% but not more than 10%, and £500,000 if it got not more than 5%. If we reduce all these numbers to zero, we will have a fair and balanced campaign, which is what my amendment seeks to do. I would have thought that everyone in this House would be in favour of that.

The point is that the Conservative Party, under the PPERA, is able to spend up to £7 million on the referendum if it chooses to, as a registered participant. If it decides not to register, why should its decision impact on other parties which have policies and desires to campaign for in this referendum? That sounds undemocratic.

I agree with the noble Lord, which is why I want to make sure that all parties cannot spend any money at all, and that the people who can spend the money are the designated campaigners, so that there is a fair basis. I beg to move.

The amendment of the noble Lord, Lord Hannay, has a lot of logic. I was amused, however, when he referred to how difficult it is to understand legislation that refers back to previous legislation. Exactly—and that is what a lot of us complain about with the European Union. The noble Lord may remember that, when the constitutional treaty had to be ratified by national parliaments, no comprehensive single version was available. Everybody had to refer back to previous legislation. In the case of the Czech Republic, the relevant documents had not even been translated into the national language.

That said, I very much agree with the points the noble Lord made, and I support his amendment. I would, however, very much like to support my noble friend Lord Forsyth. I am somewhat bemused by the intervention from the noble Lord, Lord Collins, who does not seem to take on board that we are talking about funding: about limits laid down by Parliament on the funding of both sides of the referendum. What surprises me—this is the issue I would like my noble friend to address—is that the Government simply decided to consolidate the PPERA into this legislation and did not introduce their own. They have, after all, amended various parts of the PPERA; they do not have to accept what is written into it as if it were tablets of stone.

I followed the debate in the House of Commons, which touched on this issue. The Minister in the Commons said that it is a good thing—that this is the first time we have had such comprehensive and far-reaching limits. Okay, but if you have limits they ought to be fair to the two sides of the referendum. Otherwise, why have limits at all? Would it not be better to let both sides raise what money they can and spend it? It seems to me there is a fundamental flaw in the proposal. The whole point of referenda is to deal with issues that cut across political parties; that is partly why we have them. I very much doubt we would have referenda if there were not constitutional issues that cut across different political parties. It seems perverse to say, just because a political party in a general election some time ago got 30% of the vote, it is entitled to X amount of money; and another party, which came third the time before and second last time, is allowed Y proportion of money. Why?

I will give way in a minute. If you are going to impose limits on spending, let them be fair between the two sides. After all, the government grant is equal for each side, and the limit on what the designated organisations can do is equal, one with the other, so why bring in political parties? Why say that because the Conservative Party won 30-plus% of the vote it is allowed to spend £7 million, because the Labour Party scored about 30%, it is allowed to spend £7 million, because UKIP got above 10% of the vote it is allowed to spend £4 million and because the Liberals, scored somewhere around 10%, they are allowed to spend £3 million? Of course, as my noble friend Lord Forsyth said, when you add them all up—let us exclude the Conservative Party, because it has said it is not going to fund either side in the organisation—there is a huge inequity between the limit on one side and the limit on the other. I find it very difficult to understand how this can be justified. I do not see the necessity of it. It would have been extremely simple, if the Government insist on having a cap on spending in the campaign, to have it the same for both sides. The noble Lord wanted to intervene.

I am glad that I have his agreement—or perhaps I have not, but we shall hear in a minute. The provision seems fundamentally flawed. I do not see why the Government just picked up that legislation and incorporated it into this. It seems not to make any sense whatever.

My Lords, Amendment 58 is in my name and that of my noble friend Lord Liddle, who apologises that he cannot be present today. Before I address the substance of the amendment, perhaps I may say how much I agree with the noble Lord, Lord Hannay, in his amendment and therefore agree with what the noble Lords, Lord Lamont and Lord Forsyth, said about it—that is an interesting axis of agreement across the Floor of the Chamber which does not often occur.

The noble Lord, Lord Forsyth, asked why we should bring in political parties. I was astonished by that. No one is bringing in political parties; political parties are there; political parties are part of our democracy; political parties are part of every sophisticated democracy in the world. Political parties expect to take part in political campaigns, in elections or in referenda. It would be quite extraordinary if a political party was not interested in a major political campaign.

I am sure that the noble Lord does not mean to misrepresent me. I was not suggesting that political parties should not participate—I defer to his experience of political parties, which is greater than mine—but I was referring to the fact that we should not have to bring in expenses from political parties.

I have an interesting experience of political parties. I have talked for some time about that in the past, but I shall not delay the Committee on that subject today.

I was actually quoting the noble Lord, Lord Lamont, who asked, “Why bring in political parties?”. That was an extraordinary thing to say, because political parties are part of the structure of our system and part of our national life. It is inconceivable to me that you could have a body of men and women—

I will give way in a second, but let me just complete my sentence, or my paragraph.

It would be extraordinary if you had a body of men and women who were interested in public life and the choices facing the nation and who wanted to play their part in determining the future history of our country, and a big referendum of the importance which this referendum represents came along and they did not take part in that campaign or have any views at all. The Conservative Party has of course decided to opt out of this campaign, but that is because of the peculiar situation in which it finds itself where the leadership of the party is terrified by the Eurosceptics. That has been the history of our relationship with the European Union during the past five years: everything is vetoed by the Eurosceptics and the Government are often paralysed by them. The Government are continually coming up with some ploy to buy off the Eurosceptics and, on this occasion, the Government have decided not to have their own party take part in a campaign. It is an extraordinarily anomalous position, in which a major party is supposedly silent on the great issue of the day. Just because the Conservative Party has got itself into this mess and this absurdity is no reason to deny the important role of political parties generally in a democracy or to handicap other political parties that are in no way responsible for the shambles of the Conservative Party and prevent them doing what they should have a natural right to do in any democratic election or electoral campaign.

I will give way to both noble Lords but will do so first to the noble Lord, Lord Lamont, who has been trying to catch my eye for quite a long time.

I was not aware that the noble Lord was the Speaker yet, but I am grateful to him for giving way. It was a very long paragraph; perhaps he should have a few more paragraphs in his prose.

No one is saying in supporting this amendment that political parties should not campaign vigorously or be a very important part of the referendum argument. What we are saying is that the spending limits on either side in a referendum should not be related to political parties nor to some historic measure of how the parties fared in the previous election.

That is not a sensible argument. If they are going to campaign, political parties need money. Campaigning needs money, so political parties will need money if they take part in it. If their members and supporters are willing to dig into their pockets and give them money, it would be quite absurd, in a democracy, if we used the legislature to try to prevent people campaigning in that fashion. The real problem is that the noble Lord cannot reconcile himself to the fact that there are more political parties in this country which support our membership of the European Union than there are which are against it. That is very unfortunate for him, but I have not created the situation, nor has he and nor has the legislature. It is a fact of life and it reflects the will of the people. They have decided to join parties, a numerical majority of which actually support our membership of the Union. They should be allowed to raise a reasonable amount of money in order to pursue the campaign and to continue to make sure that political parties play the part in our democratic life that they are entitled to. It ends up with the kind of arithmetic which he was quoting, except that the arithmetic used by the noble Lord, Lord Forsyth, was completely artificial because it left out the Conservative Party’s potential use of £7 million. It is entirely a matter for that party if it decides not to use it and this cannot be blamed on anyone else.

Does the noble Lord remember that the party to which he belongs had an election for its new leader not very long ago? It elected, overwhelmingly, a man who wanted to leave the European Union. How has it come about that the noble Lord now says that he belongs to a party which wants to stay in the Union?

That is an extraordinary question to ask me. I am the living embodiment of the fact that one can change one’s mind. I believe that Mr Corbyn has, in the light of events, learned wisdom which he did not possess 10 or 20 years ago. I assure the noble Lord that that wisdom consists in supporting—I repeat, supporting—our membership of the European Union. That is the official position of the Labour Party and will, of course, remain so.

The noble Lord must be aware that a large number of members of the Labour Party—among those who are left—happen to have views about EU membership which are not that supportive. Although the Labour politicians at Westminster may or may not have strong views, they control the spend and the members of the Labour Party are not going to be very happy if the party spends all their money campaigning in a direction which they may not support.

I do not think that the noble Lord is a great expert on the views of the Labour Party. I would be delighted to take him to some party meetings in Lincolnshire where he would find enormous support for our membership of the European Union from people in all walks of life. The fact remains that the Labour Party supports our Members of Parliament in the other place who, by an overwhelming majority, have voted, and will continue to vote for our policy of believing that it is fundamentally in this country’s interests to remain part of the European Union.

I must move on to speak to Amendment 58. If there is a discordant element in my sudden change of subject, I say, in anticipation of someone rising to complain, that I am not responsible for the grouping of amendments.

Will the noble Lord enlighten your Lordships as to whether he would be taking the same attitude on the last amendment if the Labour Party was as split on this matter as the Conservative Party? UKIP got 8% of the electorate voting for it in the last general election, against 24% for the Conservatives—one third of their vote. We all know that the Conservative Party is pretty split on this issue. Would the noble Lord, Lord Davies, be taking the same attitude if his party was in the same position?

In relation to the principles of our public life and our constitution, I like to think that I take positions that are consistent. Therefore my answer to the question must be yes. Political parties have an essential part to play in our democracy and their position should be respected. They should not be in any way suffocated by being told that they cannot have any money for a campaign that they genuinely believe in and where their members are willing to support them financially.

As for the complaints that the noble Lord always makes about the treatment of UKIP, in this case he does not have the ground that he normally has for complaint, because the amount of money available to UKIP—

I must finish my sentence—and it will only be a sentence on this occasion. The amount of money available to the noble Lord’s party in the referendum campaign will be a function of the votes cast for his party and not a function of the number of MPs elected with his party label. If that was the case, he really would be in a bad situation. I give way once again to the noble Lord, Lord Lamont.

I am most grateful to the noble Lord for giving way. Again I stress that this amendment I have been supporting has nothing to do with political parties participating. It has everything to do with spending limits. My question to the noble Lord is: if in a general election the laws provided that what each party could spend in a general election was related to how it had done last time, would he think that that was fair?

We could argue this for a very long time but we actually have a consensus. Until this issue arose, there was a general consensus in public life in favour of the 2000 Act. Therefore, it is quite right that we should base ourselves in this campaign on that consensus and on the practice over the last 15 years. With that, I will leave that subject—I will not take any more interventions on anything else—and turn to Amendment 58.

Amendment 58 is very important because it is all about the Government being straight with the public—which I do not think they are planning to be at the moment. They have launched a very complicated negotiation, which many of us have many thoughts about, and they hope that it will result in a deal. If it results in a deal, they intend to call a referendum and to advise the public to vote for that deal. If they do not get the deal, of course none of those things will happen.

I totally understand that while the Government are negotiating they do not want to give a running commentary—that is the Government’s phrase, not mine. I even understand why they are a bit reticent about saying exactly what their aims are in the negotiation. In fact, Eurosceptics will always say that they are not aiming high enough and will always say that whatever they get is not adequate. So they are wasting their time, but I can understand why they have got themselves in this position.

However, I cannot understand any hesitation about the Government’s duty, once they have a deal—if they have a deal—to be absolutely straight with the British public about what that deal is and to make an official, authoritative declaration to the British public of what that deal consists of. We cannot possibly have a situation in which knowledge of the deal comes out through unattributed and deniable press briefings from special advisers and spin doctors and so on. We need a clear government document when the day comes, if that deal arises.

I will not give way for a moment. I will continue and give way later in my remarks. If, as a result of the deal, the Government call a referendum, they should give advice to the British public and the electorate. They owe to the public the duty of their judgment and the duty of declaring the facts. If they do that, it is important that they do that in a public, authoritative document and not by the back-stairs methods or spinning methods that are so beloved of this Government. That is the point of the amendment in my name and that of the noble Lord, Lord Liddle. When we come to the referendum campaign, if the Government recommend, as they did in 1975, a yes vote, they should explain to the British public in an authoritative document why they are making that recommendation and set out what they consider to be the essential facts on which that recommendation is based. At this point, I will give way to the noble Lord.

I am most grateful to the noble Lord and I know how passionately he feels about these matters. But does he feel that his case is so weak that he is arguing that it is necessary to rig the whole thing in favour of his point of view? Looking at Amendment 58, he is suggesting that a statement from the campaign to leave, a statement from the campaign to stay and a statement from the Government, which may be to leave or to stay, should be sent to every household. From the point of view of people receiving this material, it is unbalanced. Why is the noble Lord so concerned about his case that he feels that it is necessary to have an unbalanced position in respect of his own amendment and in his opposition to mine?

For the first time since I debated on these matters with the noble Lord, Lord Forsyth, I am very surprised at the gaps in his historical knowledge, which normally is extremely extensive and accurate, and often brought to bear very effectively in debates in this House. He seems to have forgotten what happened in 1975, which I am old enough to remember. I had my first political campaign; I was part of the City in Europe campaign, and I am very proud of it. I have not rigged or invented anything. In this amendment, I am following precisely the wording we had in the Act which set out the basis for the 1975 referendum and entirely the practice that was followed. I am being the most rigorous constitutionalist. I hope that the noble Lord will approve of that—I think he normally does. I am following precedent and I am suggesting that precedent lays down the basis for fairness, and is always a good basis for credibility and legitimacy in public life. I will give way again, although I cannot go on giving way or I will be trying the patience of the House with the time that I am taking up.

The noble Lord will never try the patience of the House. Perhaps he is a little older than me. I can just remember the 1975 campaign and voting in it. But is he suggesting that during that campaign, every household got a leaflet from a campaign to stay in the European Union, a leaflet from a campaign to leave the European Union and a leaflet from the Government saying that we should stay in the European Economic Community, or the Common Market, as it was then, all at public expense? I do not think that that is what happened at all. But that is what his amendment proposes.

It is very unusual that I am able to answer a quite lengthy intervention from the noble Lord, Lord Forsyth, more than satisfactorily with a single word—yes. That is exactly what happened in 1975, exactly what my amendment calls for and exactly what I think is required on this occasion. I will give way to the noble Lord.

I merely intervene to say that I must be older than the noble Lord, Lord Forsyth, because I played an active part in the 1975 referendum. It was not a leaflet that was put out from each side and from the Government: there were three little booklets. Does the noble Lord, Lord Davies, agree with that?

I am most grateful for that intervention. I know that the noble Lord has a very long history of public life in local government before he came here and takes a great interest in these matters. He is absolutely right. Exactly what I have in mind is something that is an intelligent summary of the case which sets out the essential facts. There is far too much spin in the political world in which we live. We know that there is far too much dishonesty, suppression of material fact for the convenience of Governments and far too many back-stairs, deniable, non-attributable briefings and so on.

We want a situation in which any household in this country can have access if they wish to intelligent arguments both ways and can make up their own minds on that basis. Not only do I think that this would be an important element in the campaign and a great contribution to democratic transparency and democratic involvement, it would be a very good thing to go back to some of those first principles which we had in 1975 and make sure that this campaign involves serious consideration by as many people as possible of the real issues—albeit that we know that some people will be influenced by prejudices and emotive language, and some by the tabloids. But we hope that the number of those people is small in relation to our total democracy and that we have intelligent discussion, debate and consideration before we take a dramatic decision about our nation’s future.

My Lords, I have listened to my noble friends Lord Forsyth and Lord Lamont. I say to my noble friends that if my preamble takes more than 11 minutes, please move a Motion that I no longer be heard ever again. This is a relatively simple matter. In any United Kingdom election involving the four countries of the union, there will be about a dozen major political parties and thousands of fringe candidates. Between them, the major parties will offer hundreds of different policies, and it is right that they have spending limits and are able to advance their arguments for all those hundreds of policies. That is why the political parties need to spend money arguing totally different cases.

However, in the case of this referendum, there are only two campaigns: one to remain and one to leave. In those circumstances, I cannot understand why the political parties will also get money to spend on campaigns. There is nothing to stop the Labour Party or the Conservative Party or any other party campaigning: let them join the “remain” campaign or the “leave” campaign. Let them put all their effort into helping those two options: leave or remain. In those circumstances, it is grossly unfair and illogical that the political parties are getting money to spend, based on their last election results, to campaign on a simple question: do we remain in the European Union or do we leave the European Union? Let the political parties weigh in behind either campaign, and keep it simple and fair.

My Lords, I was not going to intervene but I really felt that I had to do so to support the noble Lord, Lord Davies of Stamford. He will be surprised at that, perhaps—but he was absolutely right when he said that three documents were issued at the 1975 referendum. One was from the in campaign; one was from the out campaign; and one was from the Government, with a preface by Harold Wilson. The Government recommended that we should remain in and, of course, they gave their reasons for it. Unfortunately, the Government’s reasons turned out to be rather suspect, because one of the claims that they made was that they had ruled out the prospect of economic and monetary union. We now know that that was a false statement because we have got economic and monetary union. Although we are not members of the euro, we are, in fact, members of EMU. I hope that that was a little help to the noble Lord, Lord Davies.

I hesitate to put words into the noble Lord’s mouth, and I freely acknowledge that I was wrong on the matter that, in the 1975 campaign, there were two leaflets that argued the position in favour of remaining in the European Community and only one against. The noble Lord says that he will support the noble Lord, Lord Davies, but he has spent almost a lifetime arguing that the wrong decision was made and that people were misinformed about the position. Was it not wrong, actually, for there to be two leaflets on one side as opposed to one on the other?

Yes, I agree with that. I was only confirming that the noble Lord, Lord Davies, was correct in saying that there were three pamphlets. At the time, the Labour Party was in favour of coming out. Unfortunately, the Labour Government were in favour of staying in. We are almost getting into the same situation now, although in reverse, as we approach the next referendum. That is all I wish to say about it.

My Lords, as we are in Committee, I do not think that the noble Lord, Lord Davies, can prevent me from saying what I wanted to say at the end of the first part of his recent peroration. I would just like to confirm that I was not complaining about UKIP’s possible position, and I would like to correct the record. Of the votes cast at the last general election, the Conservatives got 36.9%, the Labour Party got 30.4%, UKIP got 12.6%—not a mere 10%, as the noble Lord, Lord Lamont, suggested—and the Liberal Democrats got all of 7.9%. Those are the correct figures.

Turning to the present amendment of the noble Lord, Lord Davies, I have to disagree with him in his suggestion that there should be a statement from the Government, not only for the reasons just put forward by my noble friend Lord Stoddart, but also, more generally, because I do not think that the British people are going to be able to trust the Government’s statement on this referendum any more than they could on the last one. I will add another example to the deception that my noble friend Lord Stoddart mentioned as regards the last referendum. In 1975, the Labour Prime Minister, Harold Wilson, made a promise that if we voted to stay in the then Common Market,

“there would be no loss of essential national sovereignty”.

Of course, we all thought that he meant that there would be no loss of sovereignty whatever, because we all thought that all sovereignty was essential. However, in a somewhat subtle—to put it politely—way, he did not mean that at all. What he meant was that there would be no loss of any sovereignty that he thought was essential. Since then, the British people have discovered that we have lost most of the sovereignty that he promised we would retain. So I really do not think that we want a statement from the Government, as in this amendment, but it would be perfectly in order to have a statement from each side.

I just want to correct a figure. It has been mentioned several times that the Labour Party will have the ability to spend £7 million, but, of course, the figures on the popular vote are slightly adjusted because of the Labour and Co-op Members, where there are joint parties standing. Therefore, the figure for Labour, according to the Electoral Commission, is 29.3%, which would give it £5.5 million. According to this, UKIP would have the ability to spend £4 million. Am I to understand that the noble Lord is in favour of his party, UKIP, being limited to spending £10,000?

My Lords, my party would like to spend as much money on this campaign as it can. I was looking at the suggestion that we should have 12.6%’s worth, that being our share of the votes cast in the last election. Personally, I am in favour of that, of course.

I want to lower the temperature with a deeply nerdy amendment, Amendment 55, which concerns purdah. I apologise for not following the noble Lord, Lord Pearson—

My Lords, we have heard a lot of history this afternoon. Although the lessons of 1975 might be of interest, they are, in fact, history, and we are debating a Bill for a future referendum, rather than the past. I am speaking on behalf of the Liberal Democrats to support the amendment in the name of the noble Lord, Lord Hannay, as this amendment fits with the views of the Constitution Committee and appears to be very sensible. As to the role of political parties and how much they are funded, although it is very easy to look back and say, “Well, in 1975 this happened, that happened and the other happened”, since that time we have passed the Political Parties, Elections and Referendums Act. The Bill relates to and amends that legislation. My party has no objection to the Government’s position on that.

The final amendment that I want to speak to in this group is Amendment 58, tabled by the noble Lords, Lord Liddle and Lord Davies. Although I can see an intuitive allure in the amendment, there is another issue here which goes back to the PPERA question and pre-empts Amendment 55, in the name of the noble Lord, Lord Kerr, on purdah. It is clearly in the interest of everyone to understand the Government’s position. At Second Reading in the other place, the right honourable Philip Hammond, the Foreign Secretary, talked about wanting to suspend Section 125 of the Act because the Government would want to come back and sell the deal that they had renegotiated. In practice, if purdah is in place the assumption will be that circulating three documents—remain, leave and the Government putting forward their own case—is in danger of breaching purdah rules. Although Amendment 58 sounds intuitively interesting, it is quite difficult to support it as currently drafted.

My Lords, what the noble Baroness says is right. This would offend against the purdah rules. Even more, how will the Government produce a leaflet to set out their position? Would they set out the position of the majority in the Cabinet, or the position of two groups in the Cabinet? It would be a jolly task, would it not, to set out the views of the Eurosceptics in the Cabinet, as well as the—

I am grateful to the noble Lord. The honest answer to his question, and certainly the answer that I have always envisaged, is that we should follow the precedent of 1975, when a single, coherent pamphlet was produced by the Government, justifying their recommendation of a yes vote.

The noble Lord is terribly attached to this precedent. It is only one precedent from one occasion ever. To suggest that we cannot change anything that was done then because that set the precedent is totally absurd. I am a Conservative, but even I would not suggest that what had been done once would always have to be done again and again in vaguely similar circumstances. It is quite improper.

Is the noble Lord suggesting that the Prime Minister, when he goes to negotiate on behalf of the United Kingdom, will say to the other Governments, “By the way, I’m only representing half my Government; the other half may have a different view”? How does he expect the Government to conclude negotiations?

I am terribly sorry, but I am afraid that the noble Lord misunderstands it. When the Prime Minister negotiates he speaks for the Government as a whole, but his evaluation of whether the negotiation is sufficiently good for us to remain in the European Union is another matter.

There will be views and views within the Cabinet—we are pretty sure about that. It is highly likely, is it not? We would have to have a leaflet that said, “The position of the majority of the Cabinet”—or the majority of Ministers, perhaps. I do not know whether it would include PPSs and all sorts of other people. Perhaps we could add in the spads, I do not know. However, it would have to say that there are others who take a different view. It is total nonsense. It is the product of a mindset that wants to set the thing up to be biased in one direction time and time again. Lord knows that the Bill as drafted is bad enough, but it would be a darned sight worse if we were to accept the amendment from the noble Lord, Lord Davies.

My Lords, I campaigned in the 1975 referendum to stay in the Common Market. To criticise the precedent, I well remember that we thought we had been rather clever because we had the establishment onside and we had 2:1 of the brochures sent to people. The whole objective was to marginalise the campaign of those who were not in favour of staying in. It was, in essence, a scheme to rig the whole vote.

I very much agree with my noble friend Lord Flight. Just because Harold Wilson rigged the 1975 referendum so that my noble friend Lord Forsyth and I—and indeed my noble friend Lord Flight—were conned into supporting staying in the EU, is that a reason for rigging this one? That is the question we have to ask.

The House will have noticed Amendment 40 in my name. Even my closest friends advise me that this amendment is rubbish. All I say to my noble friend the Minister is that I will not press my amendment. She will not have to spend any time telling the House that my amendment is rubbish because I agree with that anyway.

The point of my amendment—here I pick up on my noble friend Lord Forsyth’s amendment—is that we need to cap the expenditure of both sides. It is absolute nonsense to talk about the percentages of votes that people had in the last election. Let us be honest: this referendum will be decided roughly half and half by the voters of this country. Some 10% either way will make the decision. Ultimately, some Labour voters will vote to come out; even some UKIP voters will vote to stay in. A lot of Liberal Democrats in the West Country will vote to come out because they vote Liberal Democrat because they are anti-establishment. Their chapel is nothing to do with the Eurofanaticism their leaders have in this place.

Lots of people will vote in different directions. It will ultimately be quite a close vote; very roughly, it will split down the middle. So why do we not just divide the expenditure that can be spent by either camp equally? I tabled a £20 million cap in my amendment. I do not have any great feeling that it should be £20 million, £30 million or £10 million, but it should be equal on both sides.

All the way through this legislation the Government have gone out of their way to say that they are trying to level the playing field. As we noted earlier, it is not level. If the Government decide to recommend to the country that we stay in—it is still possible that they will not—they have the choice of date when that should happen. That slants the playing field in favour of those who want to stay in anyway. Why are we further slanting this by having a funding formula that gives so much money to the in campaign to the detriment of the out? This is not fair. It will not be seen by the country to be fair. If we have a result that the country votes to stay in, I can tell noble Lords now that all those who wanted to come out will cry foul and not accept the verdict of the referendum.

My Lords, I am well aware that the political definition of a level playing field is a field in which, when the ball is placed in the centre, it rolls naturally towards your opponent’s goal. That is one of the problems with trying to define a level playing field.

I am fascinated to hear so many Conservative Peers speaking in favour of an expenditure cap to ensure that one side in a campaign does not spend more than another. I look forward to the speeches that will come from those Benches the next time we discuss political party funding. Perhaps they will support a similar principle then. The Conservative Party spent a great deal more than any other party in the recent election. I do not recall any complaints from Conservatives on that—whatever position they take on the European Union—either then or since.

Is the noble Lord saying that the general election principle is unfair because one party can raise more money than another, and that this unfairness should continue in the referendum?

I am simply remarking that principles should apply across the field. I am strongly in favour of greater control over political parties’ spending, which the Conservative Party has resisted extremely strongly. I just remarked that we need to be a little more consistent than we were being.

I will make one other point relating to this group of amendments and to the next.

May I continue? I will give way to the noble Lord in a minute or two.

There is a principle that we have a Government. We are not like the United States, where Congress can stop the Government taking everything through if it wants As we were told with reference to the House of Lords’ vote last week, the principle is that the Government must be allowed to get their business through and must be able to say what they think is in the national interest. At the end of this negotiation, the Prime Minister has to be able to say, on behalf of the Government, what he now considers to be in the national interest. I note that a number of noble Lords think that the Prime Minister should not be able to make that case. That seems to me to be moving towards the sort of deadlock between Congress and the presidency seen in the United States, where what the President says has no impact at all. This is a renegotiation. At the end of the renegotiation, the Government are entitled, under our constitutional arrangements, to say what they think is in the national interest. I trust that they will do so.

My Lords, I am most grateful to the noble Lord for giving way. I actually said that I would be perfectly happy with no cap: I was not talking about caps and supporting them in the way that he suggested. However, would the noble Lord be quite content if there were caps in the general election and the Liberal party were capped at less than half the spending allowed to the Conservative and Labour parties because it got less than half the votes of those parties at the previous election?

My Lords, I have some familiarity with the previous negotiations on political funding and whether there should be a state contribution. The discussions on whether there should be public support for political parties had indeed taken on board the issue of how many votes each party got in the previous election, so the principle might well be taken, but the issue of caps on expenditure is not really one for a referendum which, I think, the out camp fears it may lose. It is a wider issue.

My Lords, it has been an interesting debate. One of the problems with referenda is that they assume there are simply two sides to an argument, when actually there are often lots of different opinions and reasons why people may wish, in the case of the European Union, to stay in or to leave. The interesting thing in this debate is that we have heard that UKIP will wish to argue its case strongly as a political party. We have heard the Conservative Party saying no, we are not going to do that. In effect, the amendment from the noble Lord, Lord Forsyth, will limit UKIP to £10,000—it will not be able to spend more than that—while if, for example, Unite registered as a participant, it could spend £700,000, as could any other organisation or individual if they registered properly as a participant.

The real issue here is how we have a fair political debate: how we ensure that all the different views in favour of remaining or leaving are properly expressed. It is clear, as we have heard, that there is a problem among those who want to leave. They do not appear able to reconcile their differences and come together as one—perhaps because they have absolutely different views about why Britain should leave. The Conservative Party has clearly not been very keen to sit on platforms with UKIP to argue its case, and certainly individuals within the party have not been keen to join in. The idea that political parties should absent themselves from this campaign is purely ridiculous.

The noble Lord keeps repeating this. Nobody is suggesting that political parties absent themselves. I am listening carefully to his argument. If you decide to have a cap on expenditure, it has to be fair to both sides. If the noble Lord is arguing that there should be no cap, that is an entirely different position. The Government’s position—arising from the 2000 Act—is that there should be a cap. Therefore, it is not that the political parties cannot participate, but that the vehicle through which they participate consists of the two campaigns. If the noble Lord is arguing that there should be no cap, I can see where he is coming from, but he seems to be arguing that there should be a cap and that the available expenditure should be unbalanced. That is ridiculous.

Actually, I am arguing that all participants in the referendum should properly account for what they raise and what they spend, and that that be recorded and sent to the Electoral Commission. That is what I am arguing for. We have heard in the debate that somehow you can create a level playing field by setting a cap on the total amount spent. What, then, is the noble Lord saying: that the “remain” campaign and the “leave” campaign agree beforehand exactly what they are going to spend and then say that is what they are going to do?

I know what caps do. I, too, have had a debate about political funding, and some dialogue with the Conservative Party about funding election campaigns. The caps on spending were important in trying to stop this continual outbidding of each other, but no political party has ever reached the cap that has been set in general elections. The Conservative Party has consistently outspent the Labour Party in general elections. There certainly has not been a level playing field. There is only one way to achieve a level playing field: by saying that £20 million from the government purse will be provided for this campaign and that it should be divided equally and then spent.

I do not, however, think that that is what noble Lords want. What noble Lords want is a fair and open debate. Political parties have an important role in that and the idea that you can cap the Labour Party’s spending to £10,000 on arguing its policy—and it does and will have a policy—is absolutely ridiculous. It is not right or fair to the democratic process. My opinion is not simply that of my party; it is also that of the Electoral Commission. The commission says, first, that, irrespective of the cap, there can be no certainty that there will be equal resources. This is a bit like a general election, where we have had caps on spending but there has been no level playing field in respect of the money that can be spent.

The other aspect of this is that everybody’s talking as if £7 million, and £5 million, is going to be available. Political parties, however, will have to raise the money. They will have to account for it. This is what all the amendments in the first group were about: transparency. The public will be more interested in transparency than the notional caps that the noble Lords opposite are talking about. People will certainly want to know who is funding the yes campaign, but they will also want to know who is funding the no campaign—who is behind it: perhaps the hedge funds or the businesses that simply see an interest in being outside.

All these things are important, but, as the Electoral Commission has said, the number of participants on each side should not be artificially limited by rules. We have seen that UKIP will want to play its part in the referendum campaign and to put its case, irrespective of whether it participates in a joint campaign. I know that the Labour Party will want to put its case strongly in respect of the social dimension to Europe and how Europe has defended workers’ rights. I do not think that the Prime Minister will necessarily wish to be part of that campaign. We will put our case, and the idea that you simply limit the Labour Party’s spending to £10,000 is not acceptable.

I strongly support the amendment from the noble Lord, Lord Hannay, not least because—this is the strongest case for it—when this was considered previously it was thought appropriate to put it in the Scottish referendum. If it was appropriate for Scotland, why is it unnecessary for this referendum? Clearly, it is.

Regarding my noble friend’s amendment—we raised this issue in Committee on Monday—the Government will come to a decision. They will need to report that decision to the people of this country. It is important that the Government’s decision is not mediated solely through these campaigns, which noble Lords opposite seem to think will have a clear view about the reasons for leaving or staying. It is really important that the Government communicate with the electorate, so they understand what the Government have negotiated and can come to a conclusion. The argument that it can be mediated only through a yes campaign or a no campaign is not acceptable. The Minister may not accept my noble friend’s amendment but I hope the Government will think seriously about how the conclusions of the negotiations are communicated properly to the electorate without being mediated through a third party.

If you are not a permitted participant in the referendum, under PPERA you are limited to £10,000. That amount is also recorded in the Electoral Commission’s briefing, and I know that the noble Lord is very keen to support the role of the Electoral Commission.

I would have thought that,

“£500,000 in the case of a person or body falling within section 105(1)(b) but not designated under section 108”,

might apply.

Political parties are treated differently, as the Minister indicated at the outset. The fact is, they are different. They are covered, as she said, by separate elements of PPERA. If political parties do not register as participants in the referendum, they will be limited to spending £10,000. I do not have to answer for the Conservative Party but, in effect, by advocating this amendment noble Lords are saying to local Conservative associations, “You cannot use your office, your staff or your resources in this referendum campaign because if you exceed £10,000, the Conservative Party will be acting illegally”.

I have tried very hard to follow the noble Lord’s speech. I still do not understand the £10,000 figure, but going back a bit in his speech, he expressed himself as being strongly in favour of caps in general elections—fair enough. If we are to have caps in general elections, should they not be the same for all political parties?

I do not know that I strongly expressed my support for caps. I said I thought they had a function and a role. Actually, what the public demand of our political parties is greater transparency. The noble Lords opposite constantly refer to the trade union movement supporting the Labour Party. Every single penny of that money is properly accounted for under a range of legislation, including the trade union Acts that cover the establishment of political funds, but I am not so sure that is clear in the case of some company donations, the origins of which can be obscure and unclear. For me, the most important thing in funding is transparency.

I am a strong advocate of capping donations, which is far more effective than having a cap on spending. Caps on spending have not been particularly effective. As we have seen in every general election since PPERA was enacted, no political party has got anywhere near the spending cap. But capping donations—limiting how people might influence policy—is much more effective. When the Committee on Standards in Public Life held an inquiry into the funding of political parties, I argued that we should have a cap of £500 on political donations because members of the public would understand that amount. Most members of the public would find it incredibly difficult to raise £50,000, which was the amount suggested by the Conservative Party. Not many members of the public would be able to donate that amount. But if you had a cap of £500, most members of the public would say, “Yes, that is a reasonable amount”. But that is the debate: it is more effective to have caps on donations than on spending. No doubt we will return to that debate some other time.

My Lords, I think I heard the noble Lord say that he assumed UKIP would want to take part in the referendum campaign, and of course it will, but I should just confirm what my great leader Nigel Farage has said: he sees UKIP as an important but cohesive part of the eventual campaign to leave the European Union. That is where UKIP is on that one.

I am glad to hear that but at the moment it does not look as though there is a single campaign. If the Conservative Party and UKIP unite as one, so be it. The public will no doubt take account of that. But the business currently before this House is an amendment that says to UKIP, “If you register as a political party, you will limited to £10,000”. I am not sure that would cover Nigel Farage’s flights around the country, so I think he will be concerned about that.

On the question of the designated organisation for leaving, does the noble Lord not accept that there are members of the Labour Party who are members of this? It is not a Conservative organisation; it is completely cross-party.

I have no doubt that individuals within political parties will wish to campaign one way or the other. I have absolutely no problem with that but I do have a problem with the idea that the Labour Party—like UKIP—is not entitled to have a policy or to be able to campaign on that policy and articulate its own message. I admire the Prime Minister. I admire his ability and I hope very much that he will use his extensive negotiating skills to achieve a settlement that will be in the best interests of this country. But that will not stop the Labour Party arguing its own view about Britain’s national interests, which will not be related solely to the reasons that the Prime Minister has. That is why it is really important that political parties have the right to campaign properly.

PPERA sets limits on what political parties can spend on a specific campaign. I am familiar with the requirements of PPERA. I am familiar with the quite onerous responsibilities of political parties, not least that they have to make sure that every single donation received is from a permitted donor; they have to double- check and cross-reference. Errors have been made in the past, I know. But we have to understand that this debate is about a cap on the ability of parties to campaign and that is why it is so important that we resist it.

As for all the questions about who has what, I am sure the Minister will clarify all the positions that I have set out. It is not for me to argue—this is a government Bill—but I am sure she will do so well.

My Lords, Amendment 34 in the name of the noble Lord, Lord Hannay, would allow the Electoral Commission to designate a lead campaigner for one side of the argument at this referendum without having to appoint one for the other. This would override the current rules that apply for designated lead organisations. These provide that the commission must designate a lead campaigner on each side, or not at all. The reason for this is clearly, as noble Lords have argued tonight, that in such matters there should be as fair a playing field as possible.

In the case of multiple applications for designation as a lead campaigner, the Electoral Commission must appoint for each side the applicant which represents “to the greatest extent” those campaigning for a particular outcome. This is intended to ensure the designation of organisations which represent the broad spread of opinion on each side. The benefits then available to the designated lead organisations ensure that each side of the argument has a fair opportunity to put its case to the wider voting public. Taken together, these provisions aim to ensure informed voting after a vibrant debate.

However, the rules for this referendum must also ensure that the referendum is run fairly and that we do not create any perception of bias. The principle that the Electoral Commission cannot designate on just one side is intended to support that objective. The benefits available to the designated lead organisations are significant. I am talking not about political parties per se—they may not end up being designated as lead organisations—but organisations designated by the Electoral Commission as lead organisations.

Allowing public funds to be used to create a distorted campaign with only one designated lead organisation would naturally raise public concern. This would clearly be the case where the commission receives applications from both sides but does not consider that those on one side meet the statutory tests. Under the amendment of the noble Lord, Lord Hannay, in this circumstance the arguments of the side that does not get appointed would not get a fair hearing. The administrative failings of those who failed to meet the statutory test should not invalidate the right of both sides to an equal opportunity to make their respective cases.

There is, of course, the view that this amendment may help avoid a circumstance where one side deliberately refuses to apply for designation to prevent the other side receiving its benefits. This could occur, for example, if one side lacks the funding to take advantage of the benefits, particularly the higher spending limits, or wishes to avoid debate on an issue of low public interest. I do not think any noble Lord is going to suggest that this case will be a matter be of low public interest. That is not going to be a feature of this referendum. Given the public interest in the referendum, a more cynical attempt to deprive the other side of the benefits of designation surely would be widely reported and deeply harmful to a campaigner’s own cause—it would be seen as being a cheat.

The noble Baroness seems to have come to the end of a passage which contains no explanation of why the Government legislated in the case of Scotland to deal with this potential problem, and no recognition of the fact that by so legislating they ensured that there was no problem. All her suggestions that this might seem to be unfair will not come about if this amendment is accepted, because there will then be two designated organisations and no interest whatever in gaming.

My Lords, the noble Lord’s amendment does not achieve that. It allows for one-sided designation. The noble Lord referred to Scotland. That was a matter for the Scottish Government and the Scottish Parliament, not the UK Government. In respect of the Scottish referendum, the Electoral Commission commented that the approach of having one-sided designation possible was appropriate in the specific circumstances of the independence referendum to reduce the risk of,

“a tactical decision not to apply for designation”.

However, it says that in other circumstances that does not necessarily pertain. So we would certainly argue that having one-sided designation could unduly damage proper and fair treatment of the arguments that need to be put forward.

Amendment 37 in the name of my noble friend Lord Forsyth would severely restrict the ability of political parties to take part. My noble friend sets the spending limits for all non-minor political parties that register as permitted participants to zero. We have had a very passionate debate this afternoon about whether there should be caps, how caps should operate and how spending should be carried out by political parties. There was an exchange with the noble Lord, Lord Collins, with regard to the fact that if one is not a permitted participant one may spend up to £10,000. That is the case here. What my noble friend seeks to do in his amendment is to say that if one registers as a permitted participant, one’s spending is capped at zero. If one does not apply to become a permitted participant, one’s spending ceiling is £10,000. I think that is why there was a bit of an exchange on that.

Surely political parties should be able to campaign at a referendum. That was established in the Political Parties, Elections and Referendums Act 2000. My noble friend Lord Lamont asked a general question, which I think is fair, which is: why use the Act as the basis for this legislation? Why not have a new piece of legislation? But the Political Parties, Elections and Referendums Act was introduced following recommendations from the fifth report of the Committee on Standards in Public Life, chaired by the noble Lord, Lord Neill of Bladen. In part it contains a framework for national referendums, which avoids the need to build a new legislative framework every time. Since PPERA was introduced, several referendums, including those on AV and, of course, Scottish independence, have taken place built on PPERA. In this country we seek to use existing law where appropriate and this is exactly what we have done. PPERA does what it says on the tin. It is the Political Parties, Elections and Referendums Act and therefore is appropriate as a model for us to use, with some amendments which make sure that people cannot get round some of the provisions.

Is my noble friend not trying to argue two contradictory things at the same time? In rejecting the amendment of the noble Lord, Lord Hannay, she said that it would be wrong to allow funds to create a distorted campaign. The argument was that if you had one side only gaining funds it would create a distorted campaign. My amendment may not be perfect in its drafting, but does the Minister accept that it must be wrong to allow political parties to spend sums such that one side is able to spend 2.3 times what the other can spend? It is not consistent with her principle that we should not allow funds to create a distorted campaign.

My Lords, I think there is some confusion between the issue of a political party carrying out a campaign and a designated lead campaigner. If my noble friend is saying that there should be a level playing field with regard to the sums of money to be spent on each campaign, that would be saying that the designated lead campaigners, if they were not a political party, would have to have a total sum of not only what they spent but what every single other person in the country who agreed with them spent. I really do not think that that is what he is trying to achieve. I accept that my noble friend is trying to introduce a discussion about apparent unfairness in the funds available to political parties. I think that that is a debate for a wider issue as to what political party funding may comprise.

I am seeking explanation only because the Minister referred to the designated campaigns earlier. This debate seems to be solely about the ability to spend money, but other things come with being a designated campaigning group, not least the right to free mail and other access. Can the Minister explain that, so we understand the importance of it?

My Lords, I will jump to a little later in my speech and just say that the designated lead campaigners are entitled not only to the spending limit which has been the subject of this debate but to a grant from public funds of up to £600,000, free delivery of mailings to every household or every elector, eligibility to make referendum broadcasts and the use of public rooms. I hope that is helpful.

I accept the point that my noble friend is making about there being a certain degree of confusion because of the way in which PPERA intersects with this Bill. However, we are talking not about spending but about a cap on the amount that can be spent. The reason for having that cap is, surely, to ensure fairness. Where is the fairness in having a cap which is 2.3 times higher for one side of the campaign than for the other?

My Lords, my noble friend is, again, conflating spending by a political party—which may not end up being a designated lead campaigner—with spending by a designated lead campaigner. To do that, we would have to change the whole nature of how this country allows its elections to be run. All I can say is that before PPERA was put into statute, matters such as this were considered, and the resulting Act tried to come to the fairest conclusion. With regard to the changes my noble friend referred to, the increase in the total amount reflects the fact that the Act received Royal Assent in 2000. The amount has merely been raised in line with inflation. No remarks were made about that in another place.

My noble friend Lord Hamilton cast scorn on his own amendment, Amendment 40. I appreciate that he tabled it because of the concern—expressed firmly here today but also in another place—about the capacity of well-funded individuals and organisations to use their spending power to influence the outcome of the referendum, as indeed might be the case in any election. My noble friend invited me not to go into too much detail on his amendment, and many of his concerns were aired in the debate on my noble friend Lord Forsyth’s amendment, so I am grateful to him for that.

The Bill includes additional controls on campaigners acting in concert, which means that where expenses are incurred as part of a common plan, they will usually count towards the spending limit of each campaigner that is party to the plan. This is supported by the Electoral Commission and aims to prevent groups of individuals or bodies colluding to circumvent spending limits. This is a well-established approach which is practical and enforceable but which also, most importantly, encourages participation.

The noble Lord, Lord Davies of Stamford, spoke to amendments on behalf of his noble friend Lord Liddle. I will explain the import of the amendments, were they to go into the Bill, and then address his pertinent point about how the Government should make their case in a statement and get information to the public. Amendment 58 would provide for every individual elector to receive a statement from each of the official lead campaigns, as well as a statement of the Government’s position through the post, although the amendment does not specify that the Government’s position must be contained within the same document. PPERA already confers a significant number of benefits on the designated lead campaigners. As I mentioned a moment ago when I was invited to list them by the noble Lord, Lord Collins, they include a free mail delivery to every household or every elector. We expect, naturally, that this opportunity will be taken up by the lead campaigners. In that respect, the noble Lord’s amendment duplicates existing provision.

However, I appreciate that the noble Lord perhaps intended his amendment to do something else: to hold the Government to account by requiring them to make a statement about what had happened in the negotiations and what the results were. We had a discussion about this on Monday in Committee in the three or four groups relating to information. The noble Lord’s amendment puts the Government in a position where they would be required to provide the statement during the period of purdah, which is not the Government’s intention. Our discussions on Monday made it very clear that the Committee wanted the Government to consider carefully how we should make a statement about our position. I made a clear commitment on Monday to look at these matters and to see what I could bring forward on Report by way of an amendment that would apply to the information being provided before the essential period of purdah.

My noble friend Lord Forsyth had the lead amendment in the last group we debated on Monday, which I think gave us a very good starting point to have a fair description of what the Government have achieved without using it as a campaigning document. I happily give way to the noble Lord if that does not answer his point on Amendment 58.

The noble Baroness will have understood that the important thing in my mind is that the Government state clearly to the public what they think about these things. In my view, if there is a deal, there should be a clear document setting out the Government’s description of that deal. During the campaign, a document should be made available setting out the authoritative case the Government are making in favour—if they are making such a case—of our remaining in the European Union. We should not be in a situation in which we just have to refer to ministerial speeches, or to this, that or the other kind of leak or suggestion. There should be one authoritative document, to which everybody in the campaign can refer. The Government seem to be shying away from that, which I very much regret. It is rather like the chairman of a company refusing to make a statement to shareholders about an important event for the company at an EGM. It is an abdication of the Government’s responsibility. In my view, that statement should be made. It could be made just before the purdah period— 29 or 30 days before the vote. That would be perfectly acceptable and would get round the purdah point.

My Lords, I obviously did not make it clear: we are proposing to do exactly what the noble Lord requires. That was my commitment on Monday, and we are in negotiation with noble Lords about what an amendment to that effect might look like. It is clear that any amendment from the Government must be acceptable to both Houses of Parliament and not just one, because it will have to go into the Bill. This is a matter we take very seriously, because of course the public should receive this information. There is no abdication of responsibility whatever. We are on the front foot on this, albeit carefully. Perhaps I should say we are on both front feet—trying not to fall over—so that it is an even playing field.

Amendment 59 would provide that the designated lead organisations for “leave” and for “remain” would receive a full-page advertisement in each UK national newspaper in the last 10 days of the campaign. I have already explained what the lead campaigners are entitled to. Appointing lead campaigners and providing them with these benefits seeks to ensure that both sides of the argument in a referendum are given an opportunity clearly and effectively to make their cases. The benefits, most notably broadcast and the mailings, represent well-established electoral tools to ensure that voters have information from both sides.

The noble Lord’s amendment suggests that the current benefits are insufficient to achieve this outcome and need to be expanded to include adverts and newspapers. For the amendment to be consistent with the provisions relating to the other benefits that campaigners receive, the benefit would have only to extend to avoiding the cost of placing the advert in the newspaper. All expenses incurred in designing and producing the advert would fall to be met by the campaigner and count against the spending limit. I make it clear that there is nothing in PPERA or the Bill which prevents campaigners taking out adverts in newspapers if they so wish. The noble Lord’s amendment would require them to do it and to incur the costs of preparing the advert.

Campaigning these days takes many forms; it is not necessarily by way of advertisements in newspapers, online campaigning being at the forefront of planning and expenditure. This is not to say that campaigners will not still choose to take out newspaper adverts—they may—but it does not seem right that the rules for the referendum should require campaigners to spend what may end up being a significant amount of money preparing a campaign product that they may not see as integral to their campaign. There may be other, more effective ways of getting their views across.

I urge the noble Lord, Lord Hannay, to withdraw his Amendment 34 and other noble Lords with amendments in this group not to move them when they are called.

The noble Baroness has not made a very persuasive case for me to withdraw my amendment. I am not referring to other amendments in the group. She has spoken, if I understand her rightly, as if Scotland were a faraway, foreign state with which we had nothing to do. When the legislation was passed to enact the referendum in Scotland it was felt that this provision needed to be put in to prevent any possibility of gaming. Our own Constitution Committee has warned the House—and that includes the Minister—that there is a risk of that here, and the Government appear not to wish to take any account of it.

When it is suggested that to put such a provision in would make the playing field less even, that is to ignore the fact that if there were gaming which resulted in there being no single designated organisation on one side, that would mean there would be no funds for the other side and there would be a level playing field: it would be nuclear winter. That would not be, I suggest, a satisfactory playing field on which to play, any more than nuclear winter is satisfactory. If we deprive an organisation that has properly designated itself of any possibility to get funds in the campaign, I do not think the Minister would think that that would be a very fair way to proceed. I do not quite know how we are to move forward on this.

I was trying not to force my way in, as I must sometimes do: I know that noble Lords have been lively today. I sought to point out earlier that the Government have evaluated the risk with regard to the referendum on the European Union, remain or leave, and put it in the category where we feel that there is enough public interest that there will be somebody who will apply—and not just one, perhaps more—to be considered as a designated lead campaigner. So that will not arise. Clearly, I did not make enough of an effort to explain it in full, but I hoped I had set out the dangers there would be if the Electoral Commission appointed only one lead campaigner and the voice of another could be stifled to the benefit of one.

The noble Baroness is ignoring a risk. It may not be a very high risk and if this amendment were accepted it would be a nil risk. She seems to be saying that the Government would prefer to run even a very small risk of this situation occurring than put a provision in the Bill which made it absolutely certain that it would not occur. I feel that that is a little unreasonable.

The noble Baroness will have noticed that my amendment has been supported on all sides of the Committee and both sides of the argument. Is she really unable to say two things? The first is that if the Government’s view on this prevails and the amendment is not accepted, she will give a commitment that if, sometime in the next few months, it becomes clear that there is not going to be a properly designated organisation on both sides, the Government will then legislate, in emergency legislation, to ensure that the other side will not be deprived of any funds. If she gave that undertaking, it would be very helpful. If she cannot give that undertaking, will she at least take this away and look at it a bit longer? We have a space between now and Report and I do not believe that this amendment is open to the suggestion of unfairness. As far as I know, nobody in Scotland complained.

My Lords, I do not think that the Committee would wish to contemplate even further legislation, but I can certainly contemplate further consideration on the basis of what the noble Lord has said. I have to say that I thought we had considered properly before today, but of course I always listen to the points made by the noble Lord and am prepared to do so before Report.

I have a question for the noble Lord about the potential risk. My understanding is that the risk is not simply gaming on the part of one side to deprive the other of funding. We constantly talk about funding when, actually, it is access to broadcast, access to free mail and all the other things that go with being a designated organisation. In evaluating the risk, does the noble Lord recognise a difficulty? Say, for example, there is no consensus among the leave campaign, so we end up with three, two or four organisations. Is the Electoral Commission, in those circumstances, permitted to decide on the merits of two or three, or does it have to say there is no lead designation?

I am not knowledgeable enough to answer the noble Lord’s question. I shall come to the Minister’s last intervention, which was helpful, in a minute, but I think she underestimates the range of possibilities.

Of course, our own Constitution Committee has raised the issue of gaming and that must be one risk, but I think there are other risks. One concerns whatever attempt the Electoral Commission makes to come to a conclusion about the designated organisation on the leave side. I do not think there will be any problem on the remain side—I cannot be certain about that, but I do not think there will be; it does not look as though there will be—but on the other side there is obviously the potential for a really serious problem. There are already two organisations, a third is said to be going to enter the fray, and if these organisations go on slugging it out and the Electoral Commission tries to adjudicate, the matter could then go to judicial review. The decision of the Electoral Commission could be appealed on judicial review. That would mean, as the present law is drafted, that the remain campaign would be deprived of all the advantages that exist for a designated organisation. That is pretty serious, frankly. What I feel is unreasonable about this is that, were this amendment accepted, none of that would happen.

I accept the noble Baroness’s offer to take this away and reflect further; she is always extremely fair in her dealings with the House. She has said she will go away and consider this further and that there will be further contacts with various noble Lords who have tabled amendments. We have a little time before Report, but I honestly think that the risk, even if it is a 1% risk, should be dealt with here and now. The case for that is pretty strong. Having said that, I beg leave to withdraw the amendment.

Amendment 34 withdrawn.

Amendment 35

Moved by

35: Schedule 1, page 12, line 19, leave out sub-paragraph (3)

My Lords, I shall speak also to my Amendments 36, 43 and 46. This group of amendments deals with the restrictions on the Government and publicly funded persons and bodies under Section 125 of the Political Parties, Elections and Referendums Act 2000 and Clause 6 of the Bill. My amendments ensure that, for the purposes of the referendum, the definition of public funds in PPERA encompasses Gibraltar public funds.

In addition, government Amendment 45 ensures that the provision on restrictions on the Government and publicly funded persons and bodies publishing material in the 28 days ending with the poll also applies to the Government of Gibraltar and other bodies that are funded from Gibraltar public funds. Finally among my amendments, government Amendment 51 ensures that exclusions in any regulations made under Clause 6 would also apply to the Government of Gibraltar and other bodies funded from Gibraltar public funds.

The issue of Section 125 and Clause 6 has been the subject of much debate already. I take this opportunity, before I conclude my words on my amendments, to set out clearly to the Committee the Government’s position on the issue, having carefully considered the views expressed at Second Reading.

I can assure noble Lords that the Government do not intend to bring forward amendments to the Bill in relation to the restrictions on the Government publishing material in the final 28 days of the campaign. We have, however, as I said, put amendments before the Committee that ensure that the restrictions apply to the Government of Gibraltar and publicly funded bodies in Gibraltar. Nor do we have plans to bring forward regulations under Clause 6. The Government have accepted the outcome of the debate in another place and the arguments put forward at Second Reading, and are not seeking to disapply Section 125.

In the Commons, we highlighted the risk that Section 125 may give rise to legal challenge because it is so widely drawn. We sought to reduce that risk of challenge by putting it beyond doubt that business as usual is not in scope of Section 125. However, another place did not accept the Government’s amendment to the section.

We agree with another place that Section 125 cannot have been intended to prevent the Government acting as the Government in carrying out routine business, including in the EU, in the last 28 days before the date of poll. We think this gives the Government a strong argument to defend against any legal challenge to wider EU business carried out in the final 28 days.

Let me be clear: we have no plans to bring forward any regulations to provide exemptions from Section 125. It remains our view that it would be wise for Clause 6 to remain in the Bill, but the issue is clear. There could be some completely unforeseen eventuality when the House would consider it appropriate that regulations should be brought forward. The Bill is clear on that, if it were to happen, but we do not foresee it and it is not our intent. We could not rush Parliament or the public with proposed changes at short notice. Any regulations would need to be made at least four months ahead of the poll, in consultation with the Electoral Commission.

The addition of the power was the considered view of another place and the Delegated Powers and Regulatory Reform Committee, which said that the approach of using regulations to specify exceptions was appropriate.

I know how much interest there is in this subject, and I shall listen very carefully to the debate this evening. I know that there was a little error in the PA report of something I said on the first day of Committee, when I said that we were not going to have a snap poll. The report left out “not”, which caused a little frisson in one or two newspapers. I repeat that we have no plans to bring forward any regulations to provide exemptions from Section 125.

In the light of that, at this stage, I wait to hear the views of other noble Lords on their amendments which lie in this large group, but I beg to move.

My Lords, I shall speak to Amendments 38, 39, 52 and 54 in my name and that of others. Amendment 38 is designed to strengthen the controls on public money and resources during the purdah period. As my noble friend will know, Section 125 of the 2000 Act only prevents the Government publishing certain materials. It does not apply to general government activity during the final four weeks of the campaign, which remains regulated by constitutional convention, not by statute.

The amendment would prevent the Government campaigning and trying to promote a leave or remain vote in the purdah period, and restrict taxpayer-funded special advisers—who, we must remember, are civil servants and paid civil servants—from assisting in referendum campaigns during the purdah period.

Amendment 39 would prevent EU institutions incurring referendum expenses or doing anything to procure a remain vote during the referendum period. Both the Government and the Electoral Commission accepted that principle when similar amendments were tabled in another place. However, they claimed that the law was sufficient to prevent EU campaigning. That is mistaken. The law referred to is the European Communities Act 1972, which provides EU institutions with full authority to engage in activities authorised by EU law. The 1972 Act must be specifically disapplied for the EU institutions to be made subject to the same campaign controls as other foreign Governments.

Amendment 52 is a short amendment to do with the Electoral Commission. At the moment, the Bill advises that Ministers should “consult” the Electoral Commission. The amendment adds “and obtain the consent”, which is an important adjustment, because we must be bound by the Electoral Commission.

Amendment 54 would leave out subsection (8), which means that Section 4(1)(c) could enable the Government to abolish purdah together. I am sure that is not their intention in the Bill, and therefore I commend the amendments.

My Lords, I am very relieved that my noble friend Lord Hamilton did not say that his amendments were nonsense this time, because I support them. I do so because I am concerned about a situation where the prospectus being put to the country is not exactly false but uncertain—where, not necessarily through any fault of their own, the Government have reached an agreement which all sides think is fine but where there is an endemic structure within it that makes it unstable. I can best illustrate the situation by very briefly going through what I understand to be the four objectives of the Government in their negotiations.

The first objective is to stop the ever-closer union. One has to say that although all sides might be able to agree to that in words, there is the acquis communautaire —the acquis communautaire is endemic within the treaty. It is there to self-implode in this context, particularly as it has always supported the move towards a centralised Europe, the European Union, by the court.

The second objective is more competition. The European Union is a trade bloc. Trade blocs exist to protect themselves against foreign competition outside the trade bloc, otherwise there is no point in having a trade bloc in the first place. A trade bloc is and always will be anti-competitive.

The multicurrency objective—that we should be allowed to have lots of currencies—is next. When we were discussing the Maastricht treaty in the other place I always felt that an endemic feature of a single European Union is that there will eventually have to be a single currency. That is always put the other way round—that a single currency means that you will have to have a single Government—but the converse is also true: that to have a single union you will ultimately have to have, if the union is to mean anything at all, a single currency. The fourth objective is to deal with immigration. I cannot think of any union, market or trade bloc that does not ultimately have freedom of movement of the people within it.

I have to say that, through no fault of the Government’s own—the various countries may well establish an agreement in the negotiations—the agreement will be unstable for the reasons I have just given. We therefore need the kind of spending restrictions implied in my noble friend’s amendments.

My Lords, I speak to Amendment 55, which stands in my name. It seems to me that the problem that we are facing comes from the very wide language of the PPERA, which clearly was not intended to deal with the problem that I am drawing attention to. No Minister or servant of the Crown can publish any information which deals with any of the issues raised by the question during the 28 days—and “publish” is defined very widely as making,

“available to the public at large, or any section of the public, in whatever form and by whatever means”.

My worry is whether that might prove obstructive to the conduct of government business in Brussels. Ministers will continue to go there, European Union committees and the Council will continue to meet, and the myriad working groups will continue their work. It seems to me that it would be possible to construe that everything said—such as a document or briefing note passed to Members of the European Parliament, a document sent to the Commission or a pleading before the court—could be said to be relevant to the issue of the question of the referendum and could be caught by this 28-day ban.

I am sure that that was nobody’s intention, and I quite understand why the Minister does not wish to go back and reopen the language that we are confronted with. I am sure that people such as Mr Bernard Jenkin, who spoke on the purdah issue in the Commons, had no intention of making it impossible for the Government to carry out their business in Brussels. These are honourable people making a completely different point.

I am puzzled by the noble Baroness saying that she is confident that the Government would have a sufficient defence if challenged during the 28-day period. I am concerned about that. It seems to me that a judicial review—a challenge in court—could be disruptive to business, even if that challenge was successfully resisted in court. It seems to me that the possibility of the challenge might be an inhibition on our people in Brussels who are working in the national interest, doing the job they are meant to do. I am therefore very puzzled by what I think I heard the noble Baroness say—that she did not envisage making any regulations on this issue. I do not know whether we can be sure. If I were the Permanent Representative, I would be very uncertain whether I would be able to do what I am paid to do with the threat of legal challenge.

I may be exaggerating the problem but it is certainly a real one. Mr Lidington, Minister of State in the Foreign Office, told the European Union Committee in evidence in July that Section 125 of the PPERA would make it,

“very difficult if not impossible for us to undertake a whole range of routine EU business in the four weeks leading up to the referendum date”.

I admit that Mr Lidington said that in the context of the presidency. The hypothetical question was: “Suppose that the referendum date and the 28 days fell within the second half of 2017, during the UK presidency of the EU”. He was talking about how very difficult if not impossible it would be to undertake a whole range of routine EU business as the presidency. However, it seems to me that if it would be difficult to advance and defend the EU interest, as the presidency is meant to do, it would be just as difficult to advance and defend the UK interest, which is the daily business of our representatives in Brussels.

I am listening very carefully to what the noble Lord is saying—and of course he has huge knowledge of this—but Section 125 refers to “promotional material”. That is what it talks about. It says that it specifically excludes material which is requested by a member of the public. If the Scotch Whisky Association or somebody wanted a particular copy of something that had been discussed, they would still be able to do that. What this prohibits is promotional material. Surely that is wholly right—that promotional material should not be allowed in this way.

If the noble Lord is right, I am delighted. If the meaning of Section 125 of the PPERA is that only material of a particular kind defined as “promotional” is caught, my problem is much smaller; in fact; it disappears. But it seems to me that the language of the Act says that any Minister of the Crown, government department or local authority may not “publish”, which,

“means make available to the public at large, or any section of the public, in whatever form and by whatever means”—

for 28 days, any material bearing on the issue that is in the question. If that is to be the case, then for 28 days we are going to be saying, “Stop the world while we consider whether we want to get off”. I worry that the answer to that is to say, “Don’t be silly; we would defend ourselves in court”. The atmosphere might be quite febrile. There might be legal challenges brought. I think there would be a considerable inhibition on the public service doing its job.

I ask the Minister to look at my amendment, which would not require the making of any regulations. It would simply create a small carve-out, an exemption, for the normal business of the Government with the European Union, in and with the Council, with the Commission, with the Court and with the Parliament. It seems to me that that is much safer ground on which to rest than the thought of defending challenges in court. I am quite sure that when they drafted the PPERA nobody intended Section 125 to have effect on the pursuit of government interests and policies abroad. I am sure that that was not what they had in mind. I am sure that nobody in the other place, in the great debates that took place there over purdah, had it in mind to make it more difficult for the Government to defend the national interest in Brussels. I would argue for my amendment as the simplest way in which to deal with that problem.

My Lords, I should like to speak to Amendments 53, 56, 61A and 61D, in my name. First, I say thank you to my noble friend the Minister for her decision to abandon making regulations under Clause 6(2). That is a fantastic step forward. Many of us expressed concern about that at Second Reading. It makes my Amendment 53, which simply required notice of any change, look a bit feeble, so I am extremely grateful. Given that my noble friend has undertaken not to make any regulations modifying Section 125 for the purposes of the referendum, I wonder whether she might be amenable to removing it from the Bill altogether, so there is no ambiguity about the position, thus ending the concerns which have been expressed. I commend the notes prepared on the PPERA, which makes it clear that Section 125, as my noble friend Lord Lamont pointed out, is concerned with promotional material. Although I have tried very hard to support the amendment of the noble Lord, Lord Kerr, I do not think it is necessary, given that the Government are not planning to make regulations under Section 125, the fear having been that it would be used as a back-door route to get round purdah. That is a great step forward.

The noble Lord, Lord Hannay, referred to the Scottish referendum campaign. In considering the amendment proposed by the noble Lord, Lord Kerr, one thing that I recalled was extremely irritating in the Scottish referendum campaign was how, in the last few days, the Government suddenly published, in concert with the other political parties, a vow, which has caused us endless difficulties subsequently. An amendment such as that of the noble Lord, Lord Kerr, would open the door to that kind of activity, which is thoroughly unhelpful. The noble Lord is groaning, but I am sure he takes the point.

At Second Reading, I asked whether the restrictions and purdah imposed under Section 125 would apply to the Scottish, Welsh and Northern Ireland Governments and to the European Commission. My noble friend said that, yes, they would apply to any person and there was no cause for concern. As my noble friend will see, I have tabled Amendment 56, which restricts the promotion of promotional material by the Scottish and Welsh Governments, the Northern Ireland Executive and the European Commission. That is not because I thought my noble friend was wrong in the assurances she gave, but because it relates to Amendment 61A, which introduces a personal surcharge on anyone who incurs expenditure in breach of these rules. This may not be the best way to do it, but I tabled the amendment because I was astonished to discover that, although Section 125 imposes purdah and restrictions, if anyone chooses to breach that purdah there is absolutely no penalty for doing so. Therefore, we have a paper tiger. All that can be done is to seek judicial review of that action, by which time the train will have left the station. The notion that a referendum could be rerun because there was a breach of purdah is stretching credulity to the point of fantasy. We had this great argument about purdah and Section 125—it has been through the other place and come here—but there is actually no penalty.

The Electoral Commission thinks that my amendment might go a bit far. However, there are precedents; I remember Dame Shirley Porter being personally fined no less than £20 million. The surcharge rules have since been taken out of local government legislation, but they certainly existed—and it would certainly concentrate the minds of the Scottish Government or anyone else tempted to breach purdah if there was some kind of sanction. I propose this in the hope that my noble friend will respond to the concerns expressed by the Electoral Commission—if not by me and others—and consider what sanction could be put in place to ensure that the purdah rules are observed.

Then, of course, we have the European Union and its institutions. It is difficult to see how we could have any sanction as, of course, we are mere vassals of the European Union. How could we possibly punish it for, or indeed prevent it, breaching purdah? Amendment 61D is an attempt to reach a negotiation—an approach that I know the Prime Minister is keen on to deal with the difficulties we have with the European Union. It proposes that there should be a negotiation now to,

“conclude an agreement between the Government and the institutions of the European Union, to the effect that the institutions will … abide by the provisions of section 125”,

and not be tempted to take on a promotional or campaigning role during the referendum.

My noble friend will no doubt tell me that that is very unlikely. However, I happened to read a piece in a newspaper a fortnight ago—I assumed it was some kind of joke—suggesting that in Scotland, the European Union was going to require farmers to put up in their fields posters indicating that they were supported by the European Union, and that the size of the posters would be determined by the amount of subsidy they received. The prospect of all the fields in Scotland being adorned with European flags and messages telling the public how generous the European Union had been in spending the money which we gave them in the first place, while we were in the sensitive period of a referendum campaign, seemed rather chilling. That makes my Amendment 61D rather important, because I would interpret suddenly providing new publicity to mislead the public about the extent of the support provided by the European Union to those farmers as an example of exactly the thing I am concerned about—and, of course, something the Government can do nothing about.

Even if my noble friend does not accept the substance of these amendments, I hope she will take them away and consider how we can strengthen the position in respect of Section 125—and perhaps even consider removing Clause 6(2) from the Bill altogether, or even Clause 6 itself, although she has said that that would be a step too far. I am most grateful to my noble friend, who has responded to the concerns expressed in the other place and delivered what it wanted, and responded to the concerns expressed by many noble Lords on Second Reading.

The noble Lord referred to the notices that our masters in Brussels have required to be erected all over the countryside. I have an idea for the farmers in question. Alongside the notice that gives the great news that our masters in Brussels have given us so much money, they could put up a notice saying, “PS. Of course, for every pound they give us, we will have given them £2.66”—which I think is the present amount. Perhaps that would put those notices into perspective, because there is no such thing as European aid to this country, as I am sure all noble Lords will agree.

Does the noble Lord not agree, though, that if somebody did something as impudent as that, measures would be taken to take their grant away?

I do not think they would be in a position to do that. If farmers were forced to do that, it would be a very good thing for those of us who wish to leave the European Union.

On Amendment 61D, tabled by the noble Lord, Lord Forsyth, he worries about the provision not having enough teeth to ensure that the European Commission behaves itself—which, of course, I forecast it will not. One could add on Report a clause which says that any money the European Union does spend in this regard can be deducted from the £12.5 billion net that we are sending to Brussels at the moment. Perhaps we can get the money back that way.

I was concerned not about the money but about the expenditure taking place within the campaign, which was breaching the rules of purdah—that is, the use of the money, rather than the actual amount.

I accept that; but if they knew they were going to lose the money if they spent it, they might be less inclined to spend it.

Of course, in the other place the Opposition resisted strongly the disapplication of purdah provisions and the other place agreed with that. Therefore, our position is quite clear. Obviously, however, Clause 6 was agreed to in the other place. I hear what the noble Lord, Lord Forsyth, is saying, but I am not sure that I quite understood his interpretation of the noble Baroness’s remarks. There is clear indication that there is no intention to lay regulations. There may be a risk, but we do not know: there are unforeseen circumstances. I am assuming that Clause 6 will be retained, and we would support that if it enables the Government to respond to something unforeseen. I assume that is what the noble Baroness is saying, and that is why we would support that. I am certainly sympathetic to the views expressed by the noble Lord, Lord Kerr.

Before the noble Lord leaves that point, could he give one example of something that might justify making the regulations?

I fear I might sound like Donald Rumsfeld if I did—talking about the unknown unknowns and the known unknowns—and I will resist the temptation. I will leave it in the capable hands of the Minister to give those examples.

However, this group of amendments gives rise to some issues, including how we define the actions of Ministers and special advisers, and the question of acting in a personal capacity. I fear that all these things are incredibly difficult to prescribe, not least: when is a Minister not a Minister; when is a spad not a spad? What about when they are working at home at weekends? The situation is clear with matters such as having no government transport, or no paid facilities when campaigning.

The noble Lord asks, when is a spad not a spad? A special adviser is paid as a civil servant, so surely he should never get involved in matters such as a referendum.

The difficulty is in the name itself. A special political adviser is not like a civil servant, though they are governed by certain Civil Service rules. Let us talk about Ministers—when is a Minister not a Minister? Such things are very difficult to legislate on, so there are problems. When special advisers are members of political parties, they are often engaged in political discussions. It seems very difficult to legislate in this Bill about how we govern them.

A good point is being made about the question of EU institutions. The Electoral Commission, which the noble Lord, Lord Forsyth, has quoted, has said that although we cannot necessarily legislate about these things, we can ensure that there is clear guidance agreed between the parties. That is a good idea.

On Amendment 55, we would appreciate the Minister repeating her assurances that normal business can be conducted and that the requirements of Section 125 will not impinge on that. The noble Lord, Lord Forsyth, has quoted the Electoral Commission, which is satisfied that the Scottish and Welsh Governments and the Northern Ireland Executive are covered by the requirements of Section 125. However, the noble Lord made a very good point about regulations and sanctions. In fact, the perpetrators do not get fined—it is the victims who get fined and the taxpayers who pay for the offence. That is something we need to look into, but I am pretty certain that clauses in a Bill are not the appropriate way to do so. We have had debates recently about the Ministerial Code. Perhaps we could table another quick amendment to ensure that what is required of Ministers is clear. That could also apply to Civil Service codes. It is within the powers of the Government to act on what the noble Lord, Lord Forsyth, is seeking, without necessarily supporting his amendment.

My Lords, in my opening speech to this group of amendments I set out the Government’s position on Section 125 of PPERA and Clause 6 of the EU Referendum Bill. This is a complicated group of amendments, so I suggest that I take them sequentially as much as possible. I will further elucidate the position on Clause 6. In particular, the amendment tabled by the noble Lord, Lord Kerr of Kinlochard, has assisted the debate today and I am grateful to him—I know that it was his intention to facilitate a debate in the House in a constructive way.

Amendment 38, tabled in the name of my noble friend Lord Hamilton, relates to the involvement of Ministers, departments and local authorities in activities for referendum purposes in the 28 days before the referendum. I can assure my noble friend that his proposed amendment duplicates to a certain extent provisions already included in the Bill.

Section 125 of PPERA places restrictions on publicly funded bodies and persons from publishing certain material in relation to the referendum in the final 28 days of the campaign. The restrictions of this section will apply, in full, following an amendment made on Report in the other place, which was referred to by noble Lords. These restrictions will apply not only to Ministers, government departments and local authorities, but also to other publicly funded persons and bodies. The Government have consistently been clear that we will not undertake any campaigning activity during the 28-day restricted period.

In addition, Ministers and civil servants, including special advisers, are subject to purdah guidance which will be issued in advance of the restricted period. This guidance will reflect the statutory provisions. Special advisers are covered. In line with long-standing precedent and convention, this guidance will make it clear that Ministers and civil servants, including special advisers, will not undertake campaign-related activity during the 28-day period. I hope my noble friend will understand that we do not support his amendment as it specifically relates to special advisers. It is already there—it is dealt with by Section 125.

Ministers acting in their official capacity, advised by special advisers and other civil servants, will be prohibited from publishing certain material in relation to the referendum in the final 28 days of the campaign. A publication by a special adviser on behalf of a Minister would also be covered by the prohibition. The role of special advisers is set out in the special advisers’ code of conduct. This code includes clear provisions in respect of special advisers’ involvement in national political activity. They will be subject to the purdah guidance that will be issued to departments ahead of the 28-day restricted period. Any campaign activity that might be undertaken by special advisers must be in their own time, outside office hours and without the use of government resources. They cannot think they can do it while on annual leave; that does not work. If a special adviser wanted to campaign full time or publicly, they would first have to resign from their government post. It is right that special advisers are able to undertake other activity in their own time and without the use of official resources. My noble friend’s Amendment 38 would inhibit their ability to do so and we believe it would place unfair restrictions on this particular group. I hope my noble friend will understand that I do not support his Amendment 38.

My noble friend’s Amendment 39 relates to the role of the EU institutions. It seeks to prevent the EU institution donating to permitted participants or directly campaigning at the EU referendum. Turning first to the issue of donations, I understand my noble friend’s concerns. This is a debate about the UK’s membership of the EU, and we need sensible controls on who can spend money to influence the outcome. As we have already discussed on previous groups, PPERA provides controls on spending and on foreign funding of permitted participants. Broadly speaking, the list of those eligible to donate to permitted participants is the same as the list of permissible donors to political parties as set out in PPERA. However, we have extended the list to take account of the inclusion of Gibraltar in this referendum and to include the bodies that since the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act have been eligible to become third-party campaigners at elections. Significantly, this means that permitted participants cannot accept donations of more than £500 from anyone who is not a permissible donor. The list of permissible donors does not include the European institutions. My noble friend referred to the European Communities Act 1972, but the provisions of that Act have no bearing on this. I can assure my noble friend that it does not provide the European institutions with a get-out. Permitted participants cannot accept donations of more than £500 from the EU institutions. It is banned.

My noble friend’s amendment aims further to prevent the EU institutions, including the European Commission, campaigning at the referendum. I am sure my noble friend is aware that under the European Union Referendum Bill the EU institutions are not on the list of those eligible to register as a permitted participant. In relation to campaigning, the Bill does not place controls on the activities of the EU institutions directly, which I know is my noble friend’s concern. That is because our national legislation does not regulate behaviour outside our jurisdiction, but also because if the institutions are operating within our jurisdiction, they are afforded immunities and privileges under EU law. We recognise my noble friend’s concern, which is shared by others, but we believe that the best way to prevent the EU institutions influencing the outcome of the referendum is through a process of constructive dialogue. I can assure the Committee that Ministers are already deeply involved in just that.

I now turn to the amendments which relate to Clause 6. I shall again go sequentially for the moment and then deal with Clause 6 as a whole. I have already explained the history of what happened to Clause 6, so I shall not weary the Committee by doing it again. My noble friend Lord Hamilton has expressed further concern about the clause. He explained that Amendment 52 provides that the Government must obtain the consent of the Electoral Commission before making regulations under Clause 6. The clause as it stands requires Ministers to consult the Electoral Commission prior to making regulations. This is consistent with other provisions in electoral law that require the Electoral Commission to be consulted on proposed legislative changes. However, Ministers are not obliged to obtain the Electoral Commission’s agreement, and we do not think it is necessary to take a different approach for the EU referendum.

My noble friend Lord Hamilton tabled Amendment 54, which removes subsection (8), to ensure that we do not go back on our word that we will not reintroduce the exemption from purdah. As I understand it, he thinks that subsection (8) would give the Government the opportunity to reinstate the original exemption from purdah. I assure him that the way Clause 6 is drafted means that the subsection he is worried about would give powers to act only in matters not related to Section 125 or to matters of purdah. We do not intend to abolish purdah. Subsection (8) simply does not give the Government the power to do that.

My noble friend Lord Forsyth kindly indicated that he would not proceed with Amendment 53, so I hope he will allow me not to cover that now. He asked me for clarification on my statement at the beginning with regard to the proposals about Clause 6. I repeat that we do not plan to bring forward any regulations under the provisions of Clause 6. At the moment, we do not see the eventuality where we would wish to do so. We have considered this very carefully, and I will refer to that again when I refer to the amendment of the noble Lord, Lord Kerr. I shall subsume the two amendments.

Amendment 55, tabled by the noble Lord, Lord Kerr, seeks to ensure that normal government business, including business between the Government and the EU institutions, is not covered by the restrictions that will apply to the Government in the final 28 days. The noble Lord has given the Government the opportunity again to look very carefully at the estimate of the level of risk to government business. I can assure the Committee that the Government have been considering these matters very carefully since the consideration in the House of Commons at Third Reading earlier this autumn. We have considered this in great detail from that moment, we continue to do so and we listened to this House at Second Reading. The Government agree that there is a risk that Section 125 may give rise to legal challenge because it is so widely drawn. That is still our position. We tabled an amendment in the other place, which was not accepted, and we live with that decision by another place.

The noble Lord, Lord Kerr, in being helpful, is trying to achieve the same result as the Government’s amendment in another place by another route, by teasing out what other amendment might be acceptable. I have to say to him that I have no reason to believe that his amendment would be accepted by the other place because it would be seen as trying to achieve the same result. I regret to advise the noble Lord that his amendment is unlikely to help the Government’s position in terms of legal risk, but it was essential that we had his amendment and the opportunity to look at it carefully.

As I explained, the Government consider that Section 125 cannot have been intended to prevent the Government acting as the Government in carrying out routine business in relation to the EU in the last 28 days. We consider that this is a strong argument for us to be able to defend against any legal challenge to wider government business carried out in the final 28 days. I fully appreciate the point of the noble Lord, Lord Kerr, that he is trying to give the Government an opportunity to avoid having to defend a legal challenge. He is trying to get into that first stage. However, having given it very careful consideration, we do not believe that is the way that we should proceed. We feel that, as matters stand, we have been able to give the commitment that we do not plan to bring forward any regulations.

I should also, for completeness, comment that the amendment of the noble Lord, Lord Kerr, would raise uncertainties and areas of challenge about what is meant by “normal business”. However, I appreciate that this was a matter he brought forward for debate.

Noble Lords have asked why, then, Clause 6 should remain in the Bill. It is our view that any Government who are careful of the security of government and the security of their people should enable themselves to have access to a course of action if something unexpected happens. However, it would have to be something pretty unexpected, and that is why we are not able to forecast it at the moment. Clearly, in something as important as an election campaign for a European referendum, when so many different groups are involved, it would be important that we did not seek to disrupt that unnecessarily. Our position is that we would retain Clause 6, but we have no plans to bring forward regulations with regard to Section 125.

Can my noble friend give us an example of something unexpected that might happen that could justify using these powers?

My Lords, I just referred to the fact that a Government must have care for the security of their public. I therefore think it would be unwise to venture into any speculation on what that might be.

I ought to say, out of courtesy to my noble friends Lord Forsyth and Lord Hamilton, a word about Amendments 56 and 57—more than a word or two, by the look of this. Both Amendments 56 and 57 provide that the restrictions on publications and certain material in Section 125 also apply to the Scottish Government, the Welsh Government and the Northern Ireland Executive and to Welsh and Scottish Ministers as well as Ministers in Northern Ireland.

Amendment 61A, tabled in the name of my noble friend Lord Forsyth, provides for the Electoral Commission to propose a surcharge. I beg his pardon; my noble friend explained that he tabled his amendment because of Amendment 61A. I will come to his amendment later because it is rather different from that of my noble friend Lord Hamilton.

I can assure my noble friends Lord Forsyth and Lord Hamilton that we do not believe there is a need for clarification because Section 125 already applies to the devolved Administrations and Ministers in those Administrations, because they fall within the definition of persons or bodies whose expenses are met wholly or mainly from public funds. Therefore, Section 160 of the PPERA provides a definition of public funds that includes payments made out of the Consolidated Fund of the United Kingdom, the Scottish Consolidated Fund, the Welsh Consolidated Fund or the Consolidated Fund of Northern Ireland. Therefore, it really is clear that there is no need for this amendment.

I know that my noble friend Lord Hamilton referred to Amendment 57—which seeks to place restrictions in Section 125 on the Government of Gibraltar—as being for the avoidance of doubt, but Amendment 45 in my name, which refers to the Government of Gibraltar, modifies Section 125 for the purposes of a referendum so that the restrictions apply to the Government of Gibraltar, a government department of Gibraltar or any other body wholly or mainly funded from Gibraltar public funds. Therefore, my Amendment 45 should please my noble friend because it delivers what he wants. I can assure the Committee that the Government of Gibraltar, like the devolved Administrations and their Ministers, will therefore be subject to the restrictions in Section 125.

My noble friend Lord Forsyth also seeks to place restrictions under Section 125 on publications by the European Commission. Amendment 61D, in my noble friend’s name, seeks to achieve a similar end and place a dialogue between the Government and European Union institutions on a statutory basis, rather than the procedure I have already outlined. My noble friend would require the Government to seek a voluntary assurance from the EU institutions that they will comply with the provisions of Section 125.

I am not convinced that it is appropriate to make a statutory provision for voluntary assurance, but I can assure my noble friend that the Government will continue, as I mentioned earlier, to work with the EU institutions to prevent undue influence. Decision on our membership of the EU is rightly a matter for us—for the British public alone. Some of my ministerial colleagues and officials have been engaging with their counterparts in the European Union to explain that this is a question for the British people. The Bill makes that clear by omitting the institutions and foreign Governments from the list of permissible donors. I can say to my noble friend that we have received reassurances that the European Commission understands that this is a matter for the British people, and they will take no active part in the campaign.

My noble friend said I want to make Amendment 61D statutory. All it says is that the Government should have discussions with the European Union’s institutions—which my noble friend says we are doing—but that the Secretary of State should lay before each House of Parliament a copy of any agreement that could be concluded. Can my noble friend give an undertaking that the terms of the agreement that has been reached with the European Union should be made available to both Houses of Parliament?

The reason I say that my noble friend’s provision was intended to be statutory is in the very nature of an amendment; if it were go to go into the Bill, it would become statutory. My noble friend makes a request about what information may be available from the European Commission. I will look very carefully at that, to see what is already available and what we may achieve over the coming months. It is a reasonable request from my noble friend, and I will see what may be done. Clearly, there are circumstances in which discussions are going ahead from which a public document has not been produced, but if we are in a position where there is a public one, I will certainly do my best to provide that to my noble friend and to other noble Lords who are interested.

I ought to add, in parenthesis, that European officials are clearly aware of how counterproductive an intervention from Brussels might be, whatever it is. They will be taking clear account of that.

Amendment 61A, in the name of my noble friend Lord Forsyth, provides that the Electoral Commission should impose a surcharge if any body or person to which Section 125 applies breaches the restrictions in that section. I understand entirely what my noble friend seeks to do. He feels that there should be an immediate punishment rather than judicial review, but I say to him that the Electoral Commission has no role in the enforcement of Section 125. The Electoral Commission has made it absolutely clear that it does not welcome such a role. We consider the current arrangements sufficient—that where a breach of Section 125 might happen it should be subject to judicial review—but I certainly hear what my noble friend says. Even if I am not able to come to a conclusion that helps him, I will certainly look at that again to see if there is something that can avoid judicial review.

These matters have already been considered on many occasions, and it has not yet been possible to find a way of doing it succinctly. I can see that my noble friend wishes to intervene.

I am most grateful to my noble friend for that offer. She is being a little selective in quoting the Electoral Commission. It is true that it does not want the task of surcharging elected people, and one can see why it might recoil from that, but it is also true that it has said that the present position, where there is no sanction for people who breach purdah, is unsatisfactory and it has suggested that the Government should consider that. I would be grateful if my noble friend could come back on Report, because, clearly, if the Electoral Commission is saying that this is a paper tiger, it is certainly not acceptable.

My Lords, as I have said, we always listen very carefully to the views of noble Lords and consider the results of debates here. I hope I have been able to reassure noble Lords that we are trying to deal with the concerns that they have expressed. I know that it has been a long debate but it is one about which noble Lords felt very deeply. I therefore commend Amendment 35, which is in my name, and invite other noble Lords not to move their amendments when they are called.

Amendment 35 agreed.

Amendment 36

Moved by

36: Schedule 1, page 13, line 25, at end insert—

“14A Schedule 13 to the 2000 Act (expenses that are referendum expenses where incurred for referendum purposes) has effect for the purposes of the referendum as if in paragraph 2(a) after “public funds” there were inserted “or Gibraltar public funds”.”

Amendment 36 agreed.

Amendments 37 to 40 not moved.

Amendments 41 to 46

Moved by

41: Schedule 1, page 18, line 2, at end insert—

“( ) In relation to a donation in the form of a bequest sub-paragraph (3)(a) is to be read as referring to an individual who was, at any time within the period of 5 years ending with the date of the individual’s death, a Gibraltar elector.”

42: Schedule 1, page 18, line 29, at end insert—

“Financial limit on certain donations etc to registered parties other than minor parties23A (1) This paragraph applies where the permitted maximum is exceeded by the aggregate value of—

(a) relevant donations which are received and accepted, and(b) relevant regulated transactions which are entered into,during the referendum period by a permitted participant that is a registered party other than a minor party.(2) Each of the relevant donations and relevant regulated transactions falling within sub-paragraph (3) is to be treated for the purposes of Parts 4 and 4A of the 2000 Act (as modified by paragraphs 22 and 23 of this Schedule and paragraphs 10 to 13 of Schedule 2) as if—

(a) it had been received or entered into, as the case may be, at the end of the period of 3 months after the end of the referendum period,(b) in the case of a relevant donation, it had been received from a person who was not a permissible donor at the time, and(c) in the case of a relevant regulated transaction, it had been entered into with a person who was not an authorised participant at the time. (3) A relevant donation or relevant regulated transaction falls within this sub-paragraph—

(a) if—(i) it is the first of the relevant donations received or is the only one,(ii) no relevant regulated transaction has previously been entered into, and(iii) the value of the donation alone exceeds the permitted maximum,(b) if it is the first of the relevant regulated transactions entered into or is the only one, and the value of the transaction alone exceeds the permitted maximum, or(c) in a case not falling within paragraph (a) or (b), if the aggregate value of the relevant donation or relevant regulated transaction and the relevant donations and relevant regulated transactions previously received or entered into exceeds the permitted maximum.(4) But—

(a) in the case of a relevant donation within sub-paragraph (3)(a), only so much of the donation as exceeds the permitted maximum is a donation falling within sub-paragraph (3), and(b) in the case of a relevant donation within sub-paragraph (3)(c) where the aggregate value of the relevant donations and relevant regulated transactions previously received or entered into does not exceed the permitted maximum, only so much of the donation as exceeds the difference between that aggregate value and the permitted maximum is a donation falling within sub-paragraph (3).(5) In this paragraph—

“authorised participant” means an authorised participant for the purposes of Part 4A of the 2000 Act;“permissible donor” means a permissible donor for the purposes of Part 4 of the 2000 Act;“permitted maximum”, in relation to a permitted participant, means an amount equal to the limit imposed on that permitted participant by paragraph 1(2) of Schedule 14 to the 2000 Act (as modified by paragraph 21 of this Schedule);“relevant donation” means a donation which is received from a person who is a permissible donor in relation to that donation by virtue of paragraph 22 of this Schedule;“relevant regulated transaction” means a transaction which—(a) is a regulated transaction for the purposes of Part 4A of the 2000 Act (see section 71F of that Act), and(b) is entered into with a person who is an authorised participant in relation to that transaction by virtue of paragraph 10 of Schedule 2.(6) In this paragraph—

(a) references to a donation and to the value of a donation have the same meaning as in Part 4 of the 2000 Act (see sections 50 and 53 of that Act), and(b) references to the value of a regulated transaction have the same meaning as in Part 4A of that Act (see section 71G of that Act).”

43: Schedule 1, page 19, line 4, at end insert—

“24A Paragraph 4(1) of Schedule 15 to the 2000 Act (payments etc not to be regarded as donations) has effect for the purposes of the referendum as if after paragraph (a) there were inserted—

“(aa) any grant provided out of Gibraltar public funds;”.”

44: Schedule 1, page 20, line 4, at end insert—

“(b) before paragraph (b) there were inserted— “(ab) section 56(2) shall have effect as if for the words from “by virtue” to the end of paragraph (b) there were substituted “by virtue of paragraph 6(1) of Schedule 15, or which it is decided that the party should for any other reason refuse, then—(a) unless the donation falls within paragraph 6(1)(b) of Schedule 15, the donation, or a payment of an equivalent amount, must be sent back to the person who made the donation or any person appearing to be acting on his behalf, and (b) if the donation falls within that provision, the required steps (as defined by section 57(1)) must be taken in relation to the donation,”; and”, and(c) at the end of paragraph (b) there were inserted “; and(c) section 58(1) shall have effect as if in paragraph (a) for the words from “by virtue” to “party” there were substituted “by virtue of paragraph 6(1)(a) or (b) of Schedule 15, the party”.””

45: Schedule 1, page 23, line 33, at end insert—

“Application to Gibraltar public bodies of restriction on publication of promotional material31A (1) Section 125 of the 2000 Act (restriction on publication etc of promotional material by central and local government etc) has effect for the purposes of the referendum with the following modifications.

(2) Subsection (2) has effect for those purposes as if after paragraph (a) there were inserted—

“(aa) the Government of Gibraltar or any Gibraltar government department; or”.(3) Subsection (2)(b) has effect for those purposes as if for the words from “wholly or mainly” to the end there were substituted “wholly or mainly—

(i) out of public funds or by any local authority; or(ii) out of Gibraltar public funds.”(4) Subsection (3) has effect for those purposes as if after “Sianel Pedwar Cymru” there were inserted “or the Gibraltar Broadcasting Corporation”.”

46: Schedule 1, page 27, line 26, at end insert—

“Interpretation38 Section 160 of the 2000 Act (general interpretation) has effect for the purposes of the referendum as if the following subsection were inserted after subsection (4)—

“(4A) References in this Act (in whatever terms) to expenses met, or things provided, out of “Gibraltar public funds” are references to expenses met, or things provided, by means of—

(a) payments out of—(i) the Gibraltar consolidated fund; or(ii) monies voted by the Gibraltar Parliament; or(b) payments by the Government of Gibraltar or any Gibraltar government department.””

Amendments 41 to 46 agreed.

Schedule 1, as amended, agreed.

Schedule 2: Control of loans etc to permitted participants

Amendments 47 and 48

Moved by

47: Schedule 2, page 45, line 23, leave out paragraph (b)

48: Schedule 2, page 47, line 21, at end insert—

“Persons with whom certain registered parties may enter into loan agreements etc10 (1) Sub-paragraph (2) applies if—

(a) a permitted participant— (i) is a party to a transaction which is a regulated transaction for the purposes of Part 4A of the 2000 Act, or(ii) derives a benefit from a transaction which is a connected transaction for the purposes of that Part,(b) that transaction is entered into during the referendum period,(c) the permitted participant is a registered party that is not a minor party,(d) any of the other parties to the regulated transaction or any of the parties to the connected transaction (as the case may be) is a person (“the unauthorised person”) who, in relation to that transaction, is not an authorised participant for the purposes of Part 4A of the 2000 Act by virtue of section 71H of that Act, and(e) the unauthorised person is a person within sub-paragraph (3).(2) In relation to the transaction mentioned in sub-paragraph (1)(a)(i) or (ii), the unauthorised person is to be regarded for the purposes of Part 4A of the 2000 Act as an authorised participant.

(3) The persons within this sub-paragraph are—

(a) a Gibraltar elector;(b) a body falling within any of paragraphs (b) to (g) of section 54(2A) of the 2000 Act;(c) a body incorporated by Royal Charter which does not fall within section 54(2) of that Act;(d) a charitable incorporated organisation within the meaning of Part 11 of the Charities Act 2011 or Part 11 of the Charities Act (Northern Ireland) 2008;(e) a Scottish charitable incorporated organisation within the meaning of Chapter 7 of Part 1 of the Charities and Trustee Investment (Scotland) Act 2005 (asp 10);(f) a partnership constituted under the law of Scotland which carries on business in the United Kingdom.(4) In this paragraph “Gibraltar elector” has the same meaning as in the 2000 Act (see section 160(1) of that Act).

11 Where paragraph 10 applies in relation to a transaction to which a permitted participant is a party, or from which a permitted participant derives a benefit, paragraph 2 of Schedule 6A to the 2000 Act (details to be given in quarterly reports) has effect as if—

(a) in sub-paragraph (1) for “(10)” there were substituted “(10C)”, and(b) the following sub-paragraphs were inserted after sub-paragraph (10)—“(10A) In the case of a body within paragraph 10(3)(c) of Schedule 2 to the European Union Referendum Act 2015 (body incorporated by Royal Charter) the report must give—

(a) the name of the body, and(b) the address of its main office in the United Kingdom.(10B) In the case of a body within paragraph 10(3)(d) or (e) of that Schedule (charitable incorporated organisation) the report must give—

(a) the name of the body, and(b) the address of its principal office.(10C) In the case of a body within paragraph 10(3)(f) of that Schedule (Scottish partnership) the report must give—

(a) the name of the body, and(b) the address of its main office in the United Kingdom.”12 (1) This paragraph applies to a variation of a regulated transaction if—

(a) the regulated transaction was entered into by a permitted participant during the referendum period,(b) the permitted participant is a registered party that is not a minor party,(c) one of the other parties to the regulated transaction is an authorised participant in relation to the transaction by virtue of paragraph 10 of this Schedule, and (d) the variation has the effect of increasing the value of the regulated transaction or enabling it to be increased. (2) It does not matter for the purposes of sub-paragraph (1)(d) when the variation is entered into or when the increase takes effect or could take effect.

(3) The variation is to be treated for the purposes of sections 71I(2) to (4) of the 2000 Act as a regulated transaction in which another participant is not an authorised participant.

(4) An order made under section 71I(4) of the 2000 Act in relation to a variation to which this paragraph applies may in particular—

(a) require that any amount owed as a result of the variation be repaid (and that no further sums be advanced under the terms of the variation);(b) where any additional security is provided under the terms of the variation, require that security to be discharged.(5) In this paragraph—

(a) “authorised participant” means an authorised participant for the purposes of Part 4A of the 2000 Act;(b) “regulated transaction” and references to the value of a regulated transaction have the same meaning as in Part 4A of the 2000 Act (see sections 71F and 71G of that Act).13 (1) Section 71L of the 2000 Act (offences relating to regulated transactions) has effect with the following modifications.

(2) In each of subsections (1)(a), (2)(b), (3)(a) and (4)(a), the reference to entering into a regulated transaction of a description mentioned in section 71F(2) or (3) in which another participant is not an authorised participant includes a reference to entering into a variation to which paragraph 12 of this Schedule applies.

(3) In relation to such a variation—

(a) subsection (3)(b) has effect as if for the words “that the other participant is not an authorised participant” there were substituted “of the matters mentioned in paragraph (a)”, and(b) subsections (3)(c), (4)(c) and (10) each have effect as if the reference to the transaction were to the variation.(4) In subsection (9), the reference to a regulated transaction with a person other than an authorised participant includes a reference to a variation to which paragraph 12 of this Schedule applies.”

Amendments 47 and 48 agreed.

Schedule 2, as amended, agreed.

House resumed.