Amendment 38

Moved by Lord Tyler

38: After Clause 16, insert the following new Clause—

"£50,000 cap on donations

(1) In section 54 of the 2000 Act (permissible donors), after subsection (1) there is inserted—

"(1A) A donation received by a registered party from a permissible donor must not be accepted by the party in so far as the amount of that donation and of any other donations accepted by the party from that donor during the same calendar year exceeds £50,000.

(1B) Subsection (1A) does not apply to donations to which subsections (1) and (2) of section 55 apply, or to monies received from public funds."

(2) In section 56 of the 2000 Act (acceptance or return of donations: general), after subsection (2) there is inserted—

"(2A) If a registered party receives a donation which it is prohibited from accepting by virtue of section 54(1A), subsection (2) applies to that donation only in so far as the amount of that donation and of any other donations accepted by the party from that donor during the same calendar year exceeds £50,000."

(3) In section 58(1)(a) of the 2000 Act (forfeiture of donations made by impermissible or unidentifiable donors) after "(b)" there is inserted "or (1A)"."

My Lords, perhaps I should make clear the rationale of the grouping of this amendment with others. Amendment 38 deals with the possibility of an effective cap on donations in general. Amendment 39, also in my name and that of my noble friend Lord Rennard, deals with contributions from trade union funds. Then there are two extremely important amendments in the name of my noble friend Lord Goodhart—he enjoys the support of Members on all sides of the House—for tax relief on small donations. The rationale for the grouping is simply to make sure that we are able to shift responsibility for funding our politics from a small number of big donors—millionaires—and try to encourage many small contributions, with tax relief, for those who make modest donations. I know from our debate in Grand Committee that there is widespread anxiety to make this shift.

The amendment precisely follows the recommendations of the Hayden Phillips discussions and agreement, to which I shall come back in a moment, but it is absolutely fundamental to all the proposals that have been endorsed by all parties and those from no party to try to take big money out of British politics. Wealthy individuals, organisations and companies should not be able to buy influence in the way that they have in recent years. The inequality of influence generated by massive donations runs entirely counter to the democratic principle and erodes public trust. All of us in your Lordships' House and, indeed, Members of the other place must be very well aware of the decline in public trust in recent years.

Since I come from something of an ecclesiastical family, I am accustomed to producing or listening to a text. Therefore, I have a few texts to use this afternoon to show the widespread support for the approach represented by these amendments. In the first place, I know that there is widespread support for a reduction in the amount of expenditure by the parties. For example, Mr Gordon Brown asked Mr David Cameron at Prime Minister's Questions in December 2007 whether he would,

"support a national and local limit on expenditure".—[Hansard, Commons, 5/12/07; col. 816.]

We will come back to that point. At a policy forum in west London on 2 December 2007 Mr Brown said that,

"the latest problems in party funding show why it is right not to delay, and it is now time to act ... we have learned just how easily trust in our politics can be eroded ... we must now complete the work of change".

Then the right honourable Francis Maude, speaking on behalf of the Conservatives in the other place, said in an opposition-day debate instigated by the Conservative Party on 4 December 2007:

"We have consistently argued for comprehensive reform that would deal finally with the perception that large donors have undue influence on political parties ... Dealing with that perception requires, above all, a cap on donations".—[Hansard, Commons, 4/12/07; col. 704.]

Everyone now agrees that a cap of £50,000 would accomplish that. Finally, now that the noble Lord, Lord Bates, is in his place, I should say that he was in very good company, not only in his party but in other parties, when he said in the debate on Monday in your Lordships' House:

"We on this side of the House look forward to the day when big money is genuinely taken out of politics".—[Hansard, 15/6/09; col. 913.]

The noble Lord, with his voice and his vote this afternoon, can start that process. The day he looks forward to could indeed be today.

It is extremely important that we build on the work of the Hayden Phillips discussions. All parties took a very active role over a long period under his distinguished chairmanship. It was quite clear from his work, which he set out in great detail in his publication of the draft proposals, that he very strongly supported views that had been previously expressed by the Constitutional Affairs Select Committee in the other place in 2006. However, in Grand Committee I am sad to say that the Minister did not seem to be totally persuaded either by the Hayden Phillips discussions or by the Constitutional Affairs Select Committee because, the Minister said, he felt that a cap on donations would so clearly result in a loss of income for the larger parties—I hope that I am paraphrasing reasonably well—that the issue of state funding had to be reopened. That is not the case.

First and foremost, there is excessive expenditure by some of the big parties at election time. I do not absolve even the Liberal Democrats of that; occasionally when they have had money they have used it. However, the noble Viscount, Lord Tenby, who has extensive experience of the advertising industry—I am delighted to see him in his place—pointed out to the Grand Committee that there is huge wastage, particularly on advertising, by the political parties. It does not follow that by restricting large donations to the political parties they would somehow be so inhibited from effective campaigning that they could not do their proper job. It is also why we emphasise the need to link these restrictions on the big donors with the very important initiative taken by my noble friend Lord Goodhart and others on other Benches to try to encourage smaller donations with tax relief.

I emphasise that the experience in other countries—notably, what Barack Obama did in the United States—should encourage this approach in Britain. Barack Obama demonstrated that it was possible to raise very considerable sums of money in the height of the recession in the United States from individuals by way of the encouragement that was given in his campaign. Those who contributed then felt that they had a real connection with his campaign and a sense of ownership. It was not just a few individuals paying the bills; it was spread throughout the states. As a result, more than $750 million was raised. A record-breaking $150 million was raised in September at a time when the country was in recession. That is a very important example.

I remind the House of the specific recommendations of the Hayden Phillips team, which were the result of a cross-party agreement. They were:

"A1 There shall be a cap on donations and loans to all political parties that reach the threshold specified at A2.

A2 The cap shall apply to all parties registered in Great Britain with two or more elected representatives to Parliament, the Scottish Parliament, the National Assembly for Wales and the European Parliament. It shall apply to the party, its accounting units, and regulated donees.

A3 The final level of the cap will be £50,000".

That was the specific proposal that the parties agreed to .

I do not propose to go through all of the rationale that has been advanced for this restriction because it is well documented. I do not know of any serious argument against it. The Phillips team also relied on the work of the Constitutional Affairs Committee in the other place. I briefly refer to its recommendation on page 55, paragraph 152, of its 2006 report:

"The UK currently limits expenditure but does not limit donations, while in the U.S.A, donations are capped but spending is not. Both systems lead to significant problems. In Canada, both income and expenditure are comprehensively capped and regulated, and we were convinced by the strengths and benefits of this model".

Even in the past few days there has been very strong support among the public, demonstrated in public opinion polls, for restrictions on the huge sums of money that are donated to the political parties and, indeed, on the way in which they spend them. In the Phillips proposals the following paragraph is very significant:

"Few would now dissent from the proposition that there should be a limit on how much any one donor may contribute to a party each year. Of the parties consulted by my Review, just one — UKIP — does not favour this approach".

Everyone else supports this proposal. I hope that that will be evident from the speeches from other Benches this afternoon.

I come now to the final point in the Phillips recommendations. The summary firmly said this:

"I believe there is an emerging consensus that: the status quo, in which there are no caps on donations, is unsustainable and therefore donations to parties should be limited; and restrictions on donations should be buttressed by measures to prevent breaches of the new regulations".

I agree wholeheartedly with that. I hope your Lordships' House will as well.

I turn briefly to Amendment 39, which concerns the treatment of contributions from trade union political funds. Here again, there was very considerable consensus and agreement in the Hayden Phillips talks. I draw attention to the first part of our amendment, which sets out very clearly the intention of our special treatment of the trade unions. It says:

"The limit on donations established by", the section referring to the £50,000 cap on donations,

"shall apply to all expenditure out of trade union political funds unless—

I repeat: unless—

"all the conditions of this section have been fulfilled with regard to the expenditure in question".

There follow very careful safeguards to ensure that the democratic will of members of trade unions is fulfilled but that, in those terms, the trade union has every right effectively to act as a collecting agent for a political party, or indeed for several political parties.

The proposals that the Hayden Phillips team looked at—again, I emphasise the cross-party agreement—were very carefully thought through so that they would not penalise a trade union for taking a sensible active role in British politics but would ensure that everything was as transparent and democratic as it could be. Again, I draw attention in the amendment to the final point made by the Hayden Phillips team:

"Due to the increased transparency and choice for trade union members the ten-year review ballot on the existence of the political fund is no longer necessary and should be removed".

In other words, the quid pro quo, if I may put it like that, was that trade unions, by being more transparent and more careful in relation to their own members, and by giving them more transparency and democratic rights, would not have to suffer as much bureaucracy as they do at the moment.

I hope that with that fairly brief canter around this issue—because it has been discussed at considerable length in the other place, in the Hayden Phillips discussions and in Grand Committee—noble Lords will recognise that there is a quid pro quo in this group. By restricting the millionaires and the very big donors to political parties but, under the terms of my noble friend's amendments, with a tax concession for small donations, we have a deliberate switch from the big boys to the general public, and that must be in the best interests of British democracy. I beg to move.

My Lords, Amendments 64, 65 and 66 would provide tax relief for small donations. Amendments 64 and 66 are in my name, and Amendment 65, which is an amendment to Amendment 64, is in the name of the noble Lord, Lord Campbell-Savours.

These amendments have been grouped with Amendments 38 and 39, which, for reasons explained by my noble friend Lord Tyler, would impose a cap on large donations. However, these two sub-groups, if I may call them that, are not dependent on each other. Tax relief on small donations can be given whether or not there is a cap on large ones, and a cap on large donations can be imposed whether or not tax relief is given for small donations. However, there is an interaction between these two sub-groups because a cap on large donations is likely to reduce party funds and, if that happens, parties will have to do more fundraising from ordinary members and supporters, as in the outstanding example of the fundraising by President Barack Obama during his campaign last autumn. Tax relief on small donations will also help to achieve more fundraising from ordinary members.

The idea of giving tax relief on small or moderate donations has had considerable support in the United Kingdom and has been adopted in a number of foreign countries. Tax relief on modest donations was recommended by the Committee on Standards in Public Life, of which I was then a member, in its report on party-political funding published in 1998. In that report, the committee proposed an upper limit for tax relief of £500. I have kept to that figure in this amendment, in spite of the time that has passed. I am glad to say that two other members of that committee are present: the noble Lord, Lord MacGregor, who was then a member and certainly, with me, was an active supporter of the proposal to allow tax relief, and the noble Lord, Lord Neill of Bladen, who was the chairman of the committee at that time.

Giving tax relief on modest donations has many advantages. It is highly undesirable that all funds should come from the Government, as that greatly reduces the need to recruit members and discourages greater contact with voters. However, it is even worse if party funding comes mainly from a small number of rich donors making large donations. That is a travesty of democracy and enables rich donors to have far too much control over party policy. It is important to encourage parties by giving tax relief for small or moderate donations, including membership subscriptions. We recognise that giving to charities should be encouraged by tax relief to donors. We believe that tax relief could be extended to donations to political parties, as those donations are also very much in the public interest and deserve tax relief.

Tax relief has been given on inheritance tax in this context since the Inheritance Tax Act 1984—25 years ago—which exempted donations by will for the political parties that won at least two seats at the previous general election or one seat and at least 150,000 votes in total. Relief from inheritance tax should surely be extended to income tax. The obvious method would be to use a version of the Gift Aid system.

I suggest, first, that the eligibility of a party to claim benefit of tax relief should be the same as that now for inheritance tax; that is, two seats at the last general election or one seat and at least 150,000 votes. Secondly, tax relief should be limited to the first £500 of donations made in any one tax year by any one donor. Thirdly, whereas a charity donor can rightly reclaim a higher rate of tax relief on the amount of Gift Aid donations, donors to political parties should not be able to do so, to avoid putting the relatively well-to-do donors in a better position. Fourthly, tax relief should be given only for gifts by individuals.

All those conditions are set out in Amendment 64. They produce a simple and workable system, which in Grand Committee was supported by Members from all three parties. The Electoral Commission has said in its briefing for this Report stage:

"In principle the Commission welcomes measures that incentivise public engagement in politics and help parties to campaign effectively. Proposals for fiscal incentives are for Parliament to consider in the light of other priorities".

The "other priorities" are the rub now. I recognise that we are in a difficult tax situation. I was asked in Grand Committee for an estimate of the amount of money that would need to be returned by the Government every year under the scheme. It is impossible to tell, but my guess put an upper limit at £5 million. Since the original version had cut off at £1,000 rather than £500 and, more importantly perhaps, since recent events must have decreased the willingness of members of the public to contribute to political parties, the present prospective upper limit is probably something less than £4 million.

I understand the problem, but if the Government are not willing to pay that small sum in the near future, I suggest two alternatives. The first would be to accept Amendments 64 and 66 but to withhold the commencement order for that new clause and schedule until the financial situation makes this easier. The other would be to accept Amendment 65 from the noble Lord, Lord Campbell-Savours, which is an amendment to my Amendment 64 and would reduce the cut-off point from £500 to £15 a year. I do not in principle welcome Amendment 65, because it would produce too little money, but if the Government were prepared to accept it, but not to accept the unamended format of my Amendment 64, I would say that a quarter of a loaf is better than no bread. In those circumstances, although not in others, I would accept the amendment proposed by the noble Lord, Lord Campbell-Savours.

Amendments 64 and 66 provide a simple system for the waiver of taxation on modest donations by individuals to recognise political parties. That is a good thing in its own right, and even more so if supplies of money to political parties are cut back by the capping of large donations. I invite your Lordships' House to support Amendments 64 and 66.

My Lords, I speak in support of Amendment 64. As the noble Lord, Lord Goodhart, pointed out, I was chairman of the committee that recommended to Parliament that tax relief should be allowed on donations up to the sum of £500. In reply to something that I said on Monday, the noble Lord, Lord Bach, said that in nearly every case the Government of the day accepted the committee's recommendations. On Monday, there was one example when they did not do so; here is a second example where they did not accept the recommendation in the 2000 Act. Further thought should be given to it today. One proposal that is occasionally raised but is now impossible is that funding should come directly from the state to the political parties. As a saleable proposition to the general public, that is now impossible, although it was always very unattractive.

The proposal in Amendment 64 is a way to encourage people to perform what is a useful function of supporting political parties with their money. It does not go very far and will not cost very much and is something which, in the present climate, ought to be welcomed.

I say one final word. If the amendments are pressed to a Division, I hope that we will be able to find a way to divorce that proposal from the cap. That would be desirable. I see the noble Lord, Lord Goodhart, nodding his head. Perhaps we could, when we get to that point, have a Division on the question of whether tax relief should be allowed on either the £500 figure or the £15 limit proposed by the noble Lord, Lord Campbell-Savours, and not have it confused with what is in principle a wholly different issue: the capping at £50,000.

My Lords, perhaps I could explain. Amendment 38 will be voted on separately and then there will be a vote on Amendment 64 and the amendment to it. From the point of view of voting, they will be completely separate.

My Lords, I have not taken part in the debates on this Bill before, but I hope that your Lordships will permit a small intervention. I listened to the speech of the noble Lord, Lord Tyler, which he described as a brief canter round the course. Having listened to all 13 minutes of it, I was stung into taking part by something that he said right at the beginning, which was that the £50,000 cap is agreed by all of us. I do not know whether that means the Labour Party, the Liberal party and the Front Bench of the Conservative Party, but it is certainly not agreed by me—not that that makes a great deal of difference.

I can never understand why there is such a fuss about having a cap. It seems to me that either we have parties funded by the state—as the noble Lord, Lord Neill, said, that is now, fortunately, impossible—or we have them funded by people who support them. If people support their party, I cannot see why there should be limits on the amount by which they support it. It would therefore be a great mistake if we tried to cut down the support given, whether to the Labour Party or to the Conservative Party—or even if the Liberals can find a bit here or there. It would be a pity to cut the limit, because all that means is that everyone has to go chasing around finding more money elsewhere or, alternatively, running into deficit.

My Lords, I hesitate to dissent from a view expressed by the noble Lord, Lord Neill of Bladen, but I would say the following to him on the question of state funding. If you put state funding directly to the British people, as against a system that in part almost invites corruption, I know on which side the public would come down. The problem with the argument about state funding is that we have never really set out the reasons why those of us who support it so passionately do so. We believe that it is a far more honest way of funding political parties and that it avoids all the difficulties that we have had over not just this recent period but the last 10 years.

My Amendment 65 is a probing amendment and I can assure my noble friends that I do not intend to push it to a vote. However, I would like to say this: Amendment 29 dovetails very neatly with this amendment. That is because the truth is, and we all know it, that political parties will be affected by what has happened over Amendment 29. Political parties will inevitably have to find different ways of raising revenue. The principle behind these amendments is that a covenanting tax-relief system would provide an alternative.

My problem with the amendments moved from the Liberal Democrat Benches is the cost. That was the concern that I expressed in Committee. If I remember rightly, the noble Lord, Lord MacGregor, had, throughout the period of the Thatcher Administration, an important position in government—certainly in the Treasury in the years when I was in the Commons. In Committee, he said:

"I will be arguing that every proposal for tax relief or for further state funding should be looked at extraordinarily carefully and be very well justified. Given the state of the public finances today, I would not put forward such a case ... I hope that, in more propitious times, we can address this again in preference to further state funding. It is the right way to proceed".—[Official Report, 5/5/09; col. GC 222.]

I agree with that sentiment. It is the way forward, but the problem is that we are in difficult financial conditions and I have great reservations about an amendment that would oblige the Treasury to stump up a substantial amount of cash.

The reason why I tabled my amendment is that it would cost the Treasury almost nothing but would put in place a framework on which we could build in the future. I imagine a system—in the more propitious times to which the noble Lord, Lord MacGregor, referred—where, annually, either some inflationary measure is applied to it or the threshold is raised. I think that we should be impressing on the Treasury, and on my friend Jack Straw in the other place, the importance of accepting an amendment of this nature in legislation.

I do not know whether the Liberal Democrat Benches intend to push this to a vote today. However, if the amendment were to be carried, it would be possible during Commons consideration of Lords amendments for the Government to introduce a more appropriate sum—a sum that could be afforded. I simply wonder whether that might be in the mind of Ministers if they have to reject this amendment today. If it is rejected today, I can say to my noble friends that I will be lobbying fairly extensively over the next few days, prior to Third Reading, for perhaps some concession to be made by the Government. I hope that we do not simply say no out of hand and reject this for all time; I hope that we can perhaps see a little flexibility in the response from the Dispatch Box by my noble friend.

My Lords, I rise with some diffidence—and, perhaps the noble Earl, Lord Ferrers, will be pleased to hear, briefly—to support Amendment 38.

A great deal of money is thrown about at elections, as I experienced in my misspent youth when I was involved in the marketing and advertising professions, with all the profligacy of Russian oligarchs. No one disputes the need for realistic budgets, but the siren voices of advertising and marketing men should be firmly resisted. Nothing disconnects the electorate from the electoral process more than huge sums of money, hitherto camouflaged in some cases, being dispensed in this way, together with the unwillingness of politicians of every party to embrace the idea that the electors themselves should be asked to make very modest contributions to the electoral process.

I do not wish to seem cynical, but it often seems that the more the amount of money spent in election campaigns rises, the more the number of people voting in elections falls. Surely this is a very unhealthy state of affairs, which I suggest we can put right today.

My Lords, I shall speak to Amendments 64 and 66, and to some extent to Amendment 65. As the noble Lord, Lord Goodhart, said, I was a member of the Committee on Standards in Public Life, which first put forward this recommendation. I was very disappointed that this was one of the very few of our recommendations that the Government rejected in their response. Indeed, they never really gave any reasons against it, so I am very pleased that we are having this debate again today to talk about the principle and to see whether we can find some way forward.

I should say to the noble Lord, Lord Campbell-Savours, that I fully appreciate as an ex-Chief Secretary—I think this was what he was referring to—that we must be very careful in the current circumstances about the extent to which we encourage increased tax relief or extra expenditure. What I think we are really trying to do today is take advantage of the Bill, which gives us the opportunity to establish the principle. My one difficulty with his amendment is that he refers to £15 as the limit in 2010-11. Frankly, no one will take it up at that level. The administration would be very high, and if it seemed not to work it might be regarded as a policy that was not worth while. That is my difficulty with the figure. However, if we agree on the principle in the House today, there is still an opportunity to try to get it into legislation and to work out the timetable for it.

The noble Lord, Lord Goodhart, in his usual exemplary fashion, gave all the reasons for accepting this proposal, so I shall emphasise just two points. The first relates to party funding. In my earlier years in politics, very many people in our constituencies spent a great deal of time not only actively campaigning but actively raising funds for party political work. That was hugely to the benefit of the democratic process. So much came from these small donations and fundraising activities, and it was entirely healthy. It spread interest in the democratic process, and spread political engagement much more widely.

Equally, it is unhealthy to be too reliant on large personal donations; on substantial corporate funding, although that is largely diminished now if not defunct altogether; trade union support; and, above all, on state funding, which requires no activity beyond winning votes to get it. The principle here is therefore highly desirable and is a way of re-encouraging small donations. The emphasis is on small donations, which cannot be abused by large donors getting tax relief for them. We recommended the limit of £500 in 1998, so in principle I would be in favour of indexing beyond the £500 limit. The point that has been made about President Obama's success in the American presidential elections is very clearly correct, too. This is an important way of encouraging wider participation in the political process.

I shall put my second point, which goes much wider, very concisely. When I first entered public life and got involved in politics almost 50 years ago, and entered Parliament 35 years ago, it was a profession held in high regard. MPs were regarded with great respect in their constituencies and more widely, and it was a high aspiration to become an MP. Many in other careers entered Parliament half way through their active life because they felt that it was very worth while and were prepared to make sacrifices, including that of family life and financially, to do so. It is a matter of profound distress to me that parliamentary activity and the role of an MP are regarded in the way that they are today.

I believe that nothing is more important than working for your constituents in the most important institution in the land. Above all, it is important to remember that Ministers are largely drawn from this pool. They make bigger and more profound decisions than others in leading positions in most walks of life. Yet those who aspire to these roles are being demeaned in public and, in my view, are seriously underpaid compared to those in leading positions in business, the professions and most other activities. My concern is not for the good people in public life who are currently being so derided, but, above all, given the current environment, for the good people from other professions who would have a real role to play and could enter politics. That is one of the most serious things facing our nation. It will be easy enough perhaps to get people to stand, but it will be extremely difficult to get people of the quality we want in Parliament.

I believe that this proposal plays some small part in dealing with that problem. Charitable activities are regarded as worth while and therefore attract relief. As the noble Lord, Lord Goodhart, said, there is an interesting analogy with inheritance tax where this concept is accepted; yet we are not prepared to extend it to income tax. Therefore, I also take the point made by, I think, the noble Lord, Lord Tyler, in Committee. Many charities are engaged almost in political activity for which they get tax relief, but those who are primarily involved in the activity and want to support it get no tax relief at all. Taking this principle today, if not the immediate implementation, sends a message of profound importance, which is why I so strongly support it.

My Lords, I am sorry that I have not been able for various reasons to participate earlier in discussion of this legislation. I should like to make one or two points on Amendment 39, and I speak as someone who has been a trade union official for most of my life. I understand the desire to ensure that there is proper democratic accountability for the use of funds and so on. However, there is already in place a fair amount of legislation designed to ensure just that. There are arrangements under which members can contract out of the obligation to pay the political levy at any time they wish to do so. The political funds are normally quite separate. The executive have to be accountable to the membership for their use of them. In my union and, I believe, in all unions, there is a section in the rule book which governs the way in which political funds are collected and administered. People can also complain to the registration officer.

Under this amendment, there would seem to be a lot of extra bureaucracy, and I query whether it is necessary. If the present laws are operated—I have no evidence that they are not properly operated—I do not think that there is any necessity to have any further provision in legislation. I should be interested to know whether my noble friends on the Front Bench have a different view, but that is my view at present.

My Lords, my name is down in support of Amendment 38 covering the proposal to insert a £50,000 cap on donations. I wish my name had also gone down on Amendment 39, because I think they are paired, but owing to a gremlin somewhere, unfortunately that has not happened.

The noble Lord, Lord Tyler, has outlined the case for the cap extensively and I do not propose to plough that field again. Suffice it to say that, for me, more supporters, more members and more donors in all political parties are good for our democracy because that achieves a broader base of support and involvement. Fewer, larger donors carry dangers for our democracy. I say "carry" dangers rather than necessarily have them. The obvious question is the influence of wealthy donors on the policies of a party, and here I touch on the point made by my noble friend Lord Ferrers: it is not just whether they do or they do not have an influence, but whether there is a public suspicion that they might. Public suspicion is highly corrosive, because it carries the seeds of destruction of belief in the system and the way it operates. That is why the argument that the liberty of a person to give any amount to a party, which underlay his comments earlier, does not hold water in this sensitive area.

This idea poses challenges for the two major parties. Historically, my party has benefited from large donors, although in recent years the Labour Party has largely caught up; whether that has been to its advantage is not for me to say. The Labour Party also benefits from the automatic nature of the political levy of the trades unions. I say to the noble Baroness that I am afraid there is too much anecdotal evidence of the way in which the donations are shuffled through without individual trades union members having a real say, and that knocks on the head the idea that the safeguards proposed by the noble Lord, Lord Tyler, are not required.

I do not underestimate the challenges that these issues represent and the controversy that they will arouse, but surely, in the present circumstances, we need to face them. As has been said in the debate today, as was said on Monday, and as was said in Committee, there is a crisis of loss of faith in our democratic system. It is no good us wringing our hands and saying that it is all too difficult. That is the response of people who live inside the Westminster bubble, and I believe that our fellow citizens demand more of us today.

In speaking to these amendments, perhaps I may preface my remarks by apologising to the noble Lord, Lord Tyler, because I was not precisely in my place when he spoke. I was finding my way through the crowd as he rose to move the amendment. There was a degree of cross-party harmony on the previous piece of legislation that may not continue into this Bill, but we will see.

The series of amendments we are discussing fall into two principal areas. One is the argument about donations. We discussed this at length in Committee and it was quite widely recognised that there is an anomaly in party political contributions, which do contribute towards the democratic health of our country. Indeed, the point was just made that if one is concerned about the environment and chooses to make a donation to a political party, that money is not eligible for tax relief. If someone chooses to make a donation to Greenpeace or another organisation, it is. That is a clear anomaly which needs to be addressed at some stage, although I stress the point that it should be considered at some stage. The noble Lord, Lord Goodhart, said that the cost of such a measure to the Exchequer would be around £4 million. I have no way of knowing whether the figure should be higher or lower, but my sense of the public mood at this time suggests that it would be difficult to argue in favour of an additional £4 million or £5 million of public funding being made available for political parties. While certainly we on these Benches are happy to put on the record the fact that this is something we need to move towards in principle, timing is everything in these matters, and now is probably not the time to do this.

Whether we should act on the suggestion in the probing amendment tabled by the noble Lord, Lord Campbell-Savours, that it should be bumped into another fiscal year would depend on the circumstances at the time. However, in this case the position of these Benches—certainly of the Front Bench—is to support it in principle but to question the timing.

This leads me to the wider issue of the donations cap. The noble Lord, Lord Tyler, was generous in his citations of my remarks on the first day of Report when I referred to the importance of taking big money and the significant influence that it has out of politics. I take the points that have been presented with such clarity by my noble friend Lord Hodgson in this regard. However, whether we are talking about perceived or actual influence, it is how the public perceive the political process that is important.

The Liberal Democrats, of course, have their own problems with major donors. Michael Brown, who donated £2.5 million, has turned out to be a convicted fraudster and yet they refuse to repay that money. It is important in debates of this nature to recognise that this is a problem for party politics which needs to be sorted out. It is not only a problem for the two main political parties; it affects all political parties.

This was touched upon by Sir Hayden Phillips in his first report, Strengthening Democracy: Fair and Sustainable Funding of Political Parties—The Review of the Funding of Political Parties—March 2007, which was in many ways the forerunner of the Hayden Phillips process. He set out a principle which is worth repeating at this stage. He said that his principle would be that nothing should be agreed until everything is agreed. It is an interesting point. He recognised the complexity of the number of different moving parts necessary to restore confidence in public life. Whether it refers to major donations or to some of the other issues touched on in another place concerning constitutional reform, there is something holistic about the need to tackle the whole issue in the round.

My Lords, to say that nothing can be done until everything can be done is, surely, a wholly absurd position to take. A series of steps have been taken, including the 2000 Act, which followed the report of the committee, being amended in the Electoral Administration Act 2006. This is a piecemeal operation.

A very Conservative one, my Lords.

My Lords, the noble Lord's concern is not necessarily with me but with Sir Hayden Phillips's principle number one. If he dissents from that, he is entitled to make the point. I happen to disagree with him. There is an argument that piecemeal reform sometimes lacks overarching principles. However, good legislation has overarching principles that should be followed through in the process of getting everyone to the table in order to reach some agreement.

That leads me to a key point on the donations cap. There is a certain unstated element—I shall say no more than that—on which I hope the noble Lord, Lord Tyler, might comment. I should be grateful for some clarity lest I inadvertently cast some aspersion on the motives here. There is an implication of a donations cap, as envisaged by the Hayden Phillips review. To plug the gap, there would be an introduction of public funding. The noble Lord is shaking his head, so I will be happy to take that away. However, the White Paper, Party Finance and Expenditure in the United Kingdom, says:

"The public funding schemes he proposed"— that is, Sir Hayden Phillips—

"based on a donations cap of £50,000, would have an overall cost of around £20-£25m per year".

Four million pounds here, £20 million to £25 million there—we are beginning to build up to some significant sums of money. That comes on top of a concern that some people may be seeking tactical advantage, rather than a principled point of seeing a decline in income or a concern over future income streams, and hoping to replace it with public funding as a whole.

When we talk about party funding, in many ways the arms race has been triggered by a dramatic increase in the amount of funding that is available to Members of Parliament in their constituencies—the incumbency factor. When I was serving in the other place, the office cost allowance, as it was called then, was in the region of £30,000. It was effectively enough to have an assistant, perhaps a part-time caseworker in the constituency, and then to pay for your printing, postage and telephones. Now that figure is up to £90,000 just for staff, and there is an additional element, the incidental expenses provision, which is another £21,000.

Communications.

I am coming to that, my Lords. As the noble Lord points out, there is also a communications allowance of £10,000 per year. Over the lifetime of a Parliament, that builds up to £50,000 spent in a particular constituency on promoting the case of the incumbent Member. It is therefore not surprising that the non-governing party, the non-incumbent, would seek to raise funds to try to match the firepower that has been ranged against it in a democratic process.

I wish only to put that point on the record. I am not saying that I have an answer for it, nor am I saying what we ought to do about those allowances. That needs to be addressed as part of the Kelly review that is taking place, along with the questions of whether they are inadvertently funding big money donations and encouraging reliance on those big donations.

The interparty talks were an important part of the process and all parties have engaged in them. The argument was that if we were going to have meaningful reform, all the political parties needed to get around the table, have their heads metaphorically banged together and sort this out, realising that there is a problem. The trade unions are perceived to have an influence on the Government. It causes concern from time to time when you see questions in debates about public sector funding cuts, and then you have a party in government faced with the prospect of a union that represents members in the public sector threatening to withhold a £1 million donation, which was announced this week, unless it gets some movement. The fact that three out of every four pounds that the Labour Party receives is from the trade unions has a disproportionate influence on the process.

I listened carefully to the expertise in the House regarding how trade union membership works. One of our principal disagreements about the proposed amendment on the donation cap, apart from the implications for public funding, is that it says that a member should be afforded an opportunity during the 12 months following the relevant expenditure to be exempted from contributing to the political fund of the union. Our party believes that it needs to go further. There ought to be an opportunity for an individual member to indicate whether they consent to having their fund given to a political party. In most cases such funding goes to the Labour Party, but I believe that the Liberal Democrats also get funding from UNISON. If this is a political levy, individual members of the union should have the right to express their preference regarding which political party it ought to go to. They should be able to do so by opting in to the political fund, rather than having it assumed and having to go through the process of contracting out.

The last meeting of the inter-party talks on the funding of political parties, chaired by Sir Hayden Phillips, took place on 31 October 2007. It was suggested that these had somehow broken down and been brought to an undue end because of the Conservative Party's attitude to funding. That is not the case, as the minutes show. On the second of the three pages of the minutes of the final meeting held on 31 October 2007, Sir Hayden Phillips said:

"As far as trade union affiliation fees the Conservative Party argued that the changes on affiliation fees contained in the draft agreement would only take people to where they believed the situation was at the current time regarding individual choice. Their view was that individual trade unionists should be able to make clearly voluntary donations to any party of the individual's choice. They hoped the Labour Party would be willing to continue the Talks on the basis of further proposals which could be developed" on this point. He continued:

"The Conservative Party saw no necessity for further controls on party spending, but would continue to discuss them as part of a package" of reforms. This is Sir Hayden's concluding point in the final meeting. It is worth getting on the record because the point of breakdown in the inter-party talks is something that has been discussed quite often. On page 3 of the minutes of the same meeting, Sir Hayden said that,

"if the other two parties were willing to accept the Conservatives' proposals made in this meeting as the basis for further work, then it would be worthwhile asking the Secretariat to prepare further papers. Third, if there was no realistic prospect of an agreement at the present time on either basis, then the Talks should be suspended".

That is the final entry in the minutes because talks were suspended. It shows that there was clearly a breakdown in the inter-party talks on this central issue. I return to that principle to say that a holistic approach was absolutely necessary on this. I do not think that the public have the stomach for the significant increases that would be the consequence of the amendment being agreed. On the public funding of political parties, the need is very much for the inter-party talks to be reconvened to reintroduce and put everything on the table, including the developments that occurred before that time.

This is a wide-ranging group of amendments and I apologise for taking so long to speak to them. However, they are very significant in terms of people's future confidence in democracy. The amendment before us does not go nearly far enough; we need to go further. The cross-party talks need to be in place and there needs to be a holistic approach which embraces all these issues and recognises public attitudes and timing as regards current economic conditions.

My Lords, this has been a very interesting debate in which many noble Lords have taken part. I hope that they will forgive me if I do not respond in detail to each point, but I shall touch on all the fundamental points that have been raised. However, there will be a couple of exceptions. I shall not respond to the very interesting speech of the noble Lord, Lord MacGregor, about our political life apart from commenting on what he said about donations. I am sure that part of his speech will resonate in many quarters. I hope that that debate continues and reaches a proper conclusion in the interests of the health of our democracy. I hope that the noble Lord, Lord Bates, will forgive me as I cannot possibly touch on all the detail of his speech as I am cognisant of our objective to complete Report stage today.

This group of amendments relates to the establishment of a cap on donations, treatment of contributions under that cap and a system of tax relief for donations. Amendment 38 would establish a cap of £50,000 per year on the amount that an individual or organisation could donate to a registered political party. Contributions from trade union political funds would be subject to this cap unless they adhered to the conditions set out in Amendment 39. These conditions seek to create a clear link between the amount paid in individual contributions to a union's political fund, by way of affiliation fees, and the amount of any subsequent donation made by the union.

The Bill is the result of a painstaking search for consensus between the parties. The Government's overriding priority throughout has been to ensure broad cross-party agreement to the changes that the Bill will make. It simply would not be acceptable to make far-reaching changes to legislation in this area without such agreement. The amendments before us today are identical to amendments that have already been debated both in Grand Committee and the other place. On each occasion they have failed to command support across the House.

When Amendment 38 was put to a vote in the other place it did not receive support from either the Conservative Party or the Labour Party. When Amendments 38 and 39 were debated in Grand Committee, they again failed to find cross-party support. And, as we have heard in the debate today, the proposals contained in the amendments are simply not broadly supported in your Lordships' House. I shall briefly set out again why they are not supported by the Government.

The idea of a cap on donations is not a new one. Two recent major reports on party funding—the Constitutional Affairs Select Committee report of 2006 and the Sir Hayden Phillips review of 2007—both recommended that a cap should be instituted. The noble Lord may claim, as he did in Grand Committee and has again today, that his amendments "absolutely follow" what was put to the parties by Sir Hayden in the cross-party talks that followed the publication of his report. In fact, Sir Hayden proposed that a cap should be phased in gradually, beginning initially at a level of £500,000 and reaching the level of £50,000 only after a period of four years.

The noble Lord must also be aware that both the Constitutional Affairs Select Committee and Sir Hayden were explicit that a donation cap could be introduced only alongside an increase in state funding. In considering the effects of the package of measures he proposed, Sir Hayden said they,

"would impose significant restrictions on the parties' freedom to raise their own funds, and new obligations in terms of compliance and reporting. These measures are in the public interest, and it is fair and reasonable to use public funds to help offset their financial impact".

Sir Hayden was also quite clear that his recommendations on party funding needed to be considered as a whole package. So if the noble Lord wishes to pray in aid Sir Hayden's review for his amendments, he must acknowledge that he is also arguing for an increase in the level of state funding of politics. The increase would be significant. The Government's White Paper, Party Finance and Expenditure in the United Kingdom, calculated that a cap of £50,000 would result in a reduction of income of £5 million to £6 million each year for the two largest parties.

The Government's view on this matter is clear. We do not consider that an increase in the level of public funding, particularly of the magnitude that would be required to offset the imposition of a donation cap, is acceptable to either the political parties or the public. Public support for politicians and political parties could scarcely be lower than it is currently. It would defy all logic to test taxpayers' patience even further by asking them to contribute more money to the parties. Noble Lords may argue that any increase in state funding should be made only as a result of reductions in government spending in other areas; however, we still think it highly unlikely that the public would support the general principle of an increase in the state funding of politics.

Amendment 39 relates to how union contributions would be treated under the donation cap. It could not be agreed unless amendment 38 was accepted. The funding activities of trade unions are already very tightly regulated as a result of successive Acts passed during the 1980s and 1990s. In its 1998 report, the Committee on Standards in Public Life considered trade union political funds. It concluded:

"We have received no evidence to suggest that the legislation is not working satisfactorily, and no case has been made out for any reform. We do not propose any change in the law in this respect".

The Government agree with that conclusion. However, the noble Lord, Lord Tyler, and other noble Lords have today again raised concerns about the funding activities of unions. Perhaps I may put on the record, once again, the words of my right honourable friend the Minister of State in the debate on Second Reading in the other place. He noted that affiliated unions recently wrote to the Labour Party general secretary,

"to confirm that they will voluntarily provide more information to members about the collection and use of political funds and the individual member's right to opt out, and that the affiliates will introduce a common text for incorporation into membership materials, including application forms. In addition, the affiliates agreed that full affiliation of the levy-paying membership is the most transparent form of political membership, and moves will be made to that end".—[Hansard, Commons, 20/10/08; col. 120.]

The Government consider that transparency in party finance is the key requirement. A cap on donations could increase the incentive to divert donations through other routes and could therefore have the ultimate effect of decreasing transparency. As I have set out, it would require a significant and unjustifiable increase in the state funding of politics. For those reasons, we are not minded to support its introduction and I hope the noble Lord will agree not to press the amendment.

I turn now to Amendments 64 to 66. Amendments 64 and 66 would introduce a system of tax relief on donations to political parties. This would be along similar lines to the system of gift aid already in place for contributions to charities, albeit with certain key differences. They would perhaps be intended to compensate parties for the shortfall of income that might result from the imposition of the cap proposed in Amendment 38. The amount available to political parties under the system proposed in Amendment 64 would be capped at £500 per donor per year and would be limited only to basic rate income tax. In order to qualify to receive relief, a political party would have to have at least two MPs elected to the House of Commons at the preceding general election.

These amendments were considered in Grand Committee and were well supported by noble Lords from all three main parties, although I note that of the main parties' Front Benches only the Liberal Democrats spoke in favour of the amendments. My noble friend Lord Campbell-Savours spoke in favour of the amendments but suggested that the amount of relief available should, initially at least, be capped at £15 per donor per year, with the Government able to increase that amount by order in subsequent years. This is formally proposed in Amendment 65.

As the noble Lord, Lord Goodhart, set out, a system of tax relief for political donations was first recommended by the Committee on Standards in Public Life in its landmark 1998 report on the funding of political parties in the United Kingdom, often referred to as the Neill report after the committee's chairman at the time, the noble Lord, Lord Neill of Bladen. The Government at the time accepted the vast majority of the Neill report's recommendations in the Bill that went on to become the Political Parties,Elections and Referendums Act 2000. However, we did not accept the recommendation to introduce tax relief and continue to oppose its introduction now.

The Neill report set out a number of arguments in favour of introducing tax relief, some of which were repeated in Grand Committee and again today. The chief argument of principle advanced in the report is that it is more democratic and in the public interest for political parties to be funded by a large number of small donations than a small number of large donations. The report considered that, by introducing tax relief, parties would be encouraged to make greater efforts to obtain smaller donations.

The Government entirely support the principle that it is preferable for parties to develop a broad base of support. However, that does not necessarily mean that the public purse should be employed to support that end. Parties are free to conduct their fundraising activities within the legislative framework. There are many steps that they could take to encourage a wider base of donors which would not require what effectively amounts to an increase in state funding of politics.

Noble Lords may argue that there is a distinction to be made between state funding and what is proposed in the amendments, in that the money would not come directly from the state, as the allocation and amount of relief would depend on the choice made by individuals. That may be so, but the end result would still be an increase in the money diverted from public funds to support political parties. As I have already set out, at present, when politicians and political parties are held in particularly low esteem by the public, we do not consider that there is any public appetite for increasing the money paid out by the state to support political parties.

We must also consider the cost of any such scheme. Under current legislation, donations below £200 are not recorded, so it cannot be known how many donations would be affected by the measure and what it would cost. However, the Neill report recommended tax relief on donations of up to £500 per year. In their response to that report, the Government estimated that the loss of revenue as a result would be some £4 million to £5 million per year. The Government do not consider that such an increase in the amount of state subsidy of politics is currently justified. Noble Lords may argue that, relative to total government spending, this would still be a small amount. The public perception, however, would be unlikely to take that argument into account, and would instead focus on the principle and the headline figure.

My noble friend Lord Campbell-Savours has proposed in Amendment 65 that the amount of relief available should be set at a very low level, such that the cost to the public purse is low but that the principle of tax relief on political donations would nevertheless be established in legislation. As I set out, the Government do not agree that any increase in state subsidy of politics is acceptable to the public in present circumstances. In any case, any system of tax relief would be expensive for both political parties and HMRC to administer. That point was remarked on in the Neill report, in the context of considering a minimum donation which would qualify for relief. The report said:

"The cost of obtaining the signature by donors of the necessary forms, and the cost of keeping the necessary records will impose an administrative burden on political parties which means that, below some level, it will become uneconomic to claim tax relief on a donation".

My Lords, the Minister has acknowledged on behalf of the Government the desirability of broadening individual support for political parties. He went on to say that there were any number of opportunities available to parties so to broaden their membership. For his position to remain reasonable in rejecting the amendments, can he say what kind of ideas the Government have in mind for broadening membership at this stage?

My Lords, it is not the role of the Government to advise political parties on how to broaden their sources of income. Indeed, if the Government and my party had any particularly bright ideas, we would be keeping them to ourselves for as long as we could.

If we set the level of relief as low as my noble friend suggests, the administrative burden involved could all but cancel out the benefit of the relief. There is a further concern with my noble friend's suggestion. Once the principle of relief is established in legislation, there would be little to stop future Governments increasing the sums involved, perhaps exponentially. It would be poor legislative practice to allow for such a possibility.

Noble Lords might argue that state funding of politics already exists in the form of Short money, Cranborne money, policy development grants and free postage at elections; so the principle is already well established. However, that money is provided with a specific purpose or political activity in mind. By contrast, tax relief on donations would amount to a broad subsidy on a political party's general activity. The amendments do not propose any restriction on the purpose for which the relief income could be used. There is a risk that under the amendments a political party would receive income which could be spent for non-political purposes. This danger was acknowledged by the noble Lord, Lord Goodhart, when we first considered these matters in Grand Committee. The amendment before us does nothing to allay these fears, however.

As has been noted, inheritance tax relief is currently provided on bequests to political parties. Noble Lords have argued that this suggests that the principle should be extended to income tax. I can only repeat what I said in Grand Committee. We are not in favour of extending this anomaly any further.

If carried and enacted, these amendments could effectively place political parties on an equal footing with charities. The Government do not agree that the two should be regarded as analogous. Charities can and do undertake campaigning activities, but only in the context of supporting the delivery of their charitable purpose. Guidance for charities is quite clear on the matter. In order to be a charity, an organisation must be established only for charitable purposes that are for the public benefit. An organisation will not be charitable if its purposes are political. Campaigning activity can be legitimate but it must not be the continuing and sole activity of the charity. There is thus a clear difference between the campaigning activities of a charity and those of a political party. The provision of gift aid to charities does not imply that it should be provided to political parties. The Government do not support these amendments, and I hope that—

My Lords, I deliberately refrained from intervening until the noble Lord was close to the end of his speech. I am bound to say—I ask him to comment—that he appears to be endeavouring to support the view that political parties are unworthy objects of finance by members of the public. He seems to be prepared to accept a specious argument that because of some misbehaviour by a handful of politicians the whole basis of our democratic system—which is political parties—should be penalised. In fact, he seems to be kow-towing to the most prejudiced views about our democracy. If he does not recognise the absolutely essential part of political parties, not only in campaigning but in developing policy for Governments, he is failing to do the task for which the public are paying him.

My Lords, I did not particularly notice a question in that speech. I am drawing a clear distinction. There is a more or less universal consensus in the United Kingdom that charities are special; that they should have a peculiar position in our tax regime; that their activities should be carefully regulated by an Act that was passed relatively recently, after extensive debate in both Houses, which in particular stuck on the point that a charity should not be solely for the purpose of campaigning. I draw a distinction between political parties and charities. That is widely done.

We are kidding ourselves if we think that the public out there are not at this moment asking themselves what political parties do and how they behave. Sadly—I entirely take the point of it being sad—the public do not hold political parties in the same regard and respect as they do the generality of charities. That is the basis on which I hope noble Lords will withdraw their amendments.

My Lords, it falls to me to respond on the whole group of amendments, which I shall do as briefly as I possible can. It has been a most useful debate. I am very grateful for the support that has been expressed, not necessarily to the whole package that is represented in this group, but, in differing degrees, to important parts of the package.

The speeches from the Minister and from the Conservative Back Bench reminded me that, whenever I look at the patron saints in the Central Lobby up on those murals, I think that we should replace them all with a mural of St Augustine, who, Members of your Lordships' House will recall, said, "Lord, make me virtuous—but not yet". Everybody who has opposed—very few have opposed—the proposals in the amendments seems to be in favour of them, but not yet.

I am particularly struck by those who think that somehow or other it is perfectly appropriate for the dead to make contributions to political parties through the tax system, but somehow those of us who are alive are not able to do so. That is an extraordinary anomaly, to which my noble friend Lord Goodhart has referred. It is also ridiculous to suggest that those charities that make a virtue of their campaigning in political matters—small "p"; they are not supporting political parties—are given full tax concessions from all donations, and yet political parties are somehow thought to be second rate.

I would resist absolutely the suggestions that somehow or other this is the thin end of the wedge for an increase in state funding. I must say in passing that the Conservative Party is of course the biggest recipient of state funding. The leader of the Conservative Party in the other place, in this place and a number of offices of the Conservative Party receive state funding in a way that no other group does, not even the government party. Let us not fool ourselves that somehow state funding is a problem.

It is, however, absolutely true that this particular set of amendments is not linked to state funding, except in this respect. As my noble friend said, the estimate is that, if there was the tax concession regime that he postulates, something between £3 million and £4 million might be the annual cost. I remind your Lordships' House that the current advertising budget of this Government is £300 million a year. This small sum, this little concession, is something in the region of 1 per cent or possibly 1.5 per cent. A lot of that funding for advertising is very close to party political persuasion. It comes a long way away from simply advertising what the Government are doing. It very often advertises what the Government wish to do.

There is a point about the trades unions. I entirely understand the concerns expressed by the noble Baroness, Lady Turner. I must direct her attention, however, to what the Prime Minister—not some Minister in some debate, but the Prime Minister—said on 4 December 2007:

"I have told the trades union movement that we have got to make the changes in the political levy so that it is more transparent as well".

That is why the very careful safeguards set out in the review by Sir Hayden Phillips, which are endorsed in Amendment 39, are very appropriate.

The Minister constantly—at Second Reading, in Grand Committee and again this afternoon—refers to the need for consensus. In Grand Committee, the noble Lord, Lord Campbell-Savours, quite rightly pooh-poohed the need for consensus. Consensus means that you move as slow as the slowest movers, which, in this respect, happen to be some of the most retrograde in the Conservative Party. In that regard, I very much appreciate the support this afternoon from the Conservative Back Benches. Here, I think that they are being realistic, and indeed the Cross-Benchers recognise that something has to be done. I am afraid that a major factor in the reduced respect that the public now have for parliamentary institutions—the noble Lord, Lord MacGregor, made a very passionate reference to this—is that they think that big money buys influence. That thread went right through the cross-party agreement in the talks convened by Sir Hayden Phillips, and I believe that it has been the background to all the contributions from all sides of the House this afternoon, with the disappointing exception of the Conservative Front Bench and the Minister.

It is a ludicrous Aunt Sally to say that allowing a small tax concession in the form suggested by my noble friend, with widespread support across the House, would somehow cause even more concern and angst among the public. I do not believe that. In fact, it would give the public the opportunity to put their money where their mouth is—in a small way, admittedly—but it would not increase state funding hugely. If members of the Conservative Party are so anxious about state funding, let them give it up. That is an obvious way in which they can make a contribution to the Exchequer. At present, in the course of a Parliament the Conservative Party receives in the region of £25 million to £30 million of taxpayers' money, most of which is not available to any other party.

We have had a very useful debate this afternoon and there has been widespread support for the changes that we would make. I remind your Lordships that it is a very simple quid pro quo—a restriction on very large donations and, in return, the encouragement of small donations through the tax system. I believe that that is a very appropriate stand for your Lordships to take, and I wish to test the opinion of the House.

Division on Amendment 38

Contents 71; Not-Contents 210.

Amendment 38 disagreed.

Amendment 39 not moved.

Schedule 4 : Reports of gifts received by unincorporated associations making donations: Schedule to be inserted into the 2000 Act

Amendments 40 to 63

Moved by Lord Tunnicliffe

40: Schedule 4, page 66, line 20, leave out "donations" and insert "contributions"

41: Schedule 4, page 66, line 21, leave out "donations" and insert "political contributions"

42: Schedule 4, page 66, line 24, leave out "donation" and insert "contribution"

43: Schedule 4, page 66, line 25, leave out "donations" and insert "contributions"

44: Schedule 4, page 66, line 27, leave out "donation" and insert "contribution"

45: Schedule 4, page 66, line 28, leave out "donations" and insert "contributions"

46: Schedule 4, page 66, line 31, leave out "donation" and insert "contribution"

47: Schedule 4, page 66, leave out lines 32 to 36 and insert—

"(2) An unincorporated association makes a "political contribution" in any of the following cases—

(a) it makes a donation (within the meaning of Part 4) to a registered party;

(b) it makes a loan of money to a registered party, or discharges (to any extent) a liability of a registered party, in pursuance of a regulated transaction (within the meaning of Part 4A);

(c) it makes a donation (within the meaning of Schedule 7) to a regulated donee;

(d) it makes a loan of money to a regulated donee, or discharges (to any extent) a liability of a regulated donee, in pursuance of a controlled transaction (within the meaning of Schedule 7A);

(e) it makes a donation (within the meaning of Schedule 11) to a recognised third party;

(f) it makes a donation (within the meaning of Schedule 15) to a permitted participant."

48: Schedule 4, page 67, line 1, leave out "donation" and insert "contribution"

49: Schedule 4, page 67, line 2, leave out "donation" and insert "contribution"

50: Schedule 4, page 67, leave out lines 4 to 12

51: Schedule 4, page 67, line 29, at end insert—

"(e) the value of a contribution within sub-paragraph (2)(b) or (d) is the amount of money lent or liability discharged."

52: Schedule 4, page 67, line 30, after "donation" insert ", or a sum of money lent,"

53: Schedule 4, page 67, line 30, leave out "it" and insert "the donation or loan"

54: Schedule 4, page 67, line 34, leave out "donation" and insert "political contribution"

55: Schedule 4, page 67, line 38, leave out first "donation" and insert "contribution"

56: Schedule 4, page 67, line 38, leave out second "donation" and insert "contribution"

57: Schedule 4, page 67, line 42, leave out "donation" and insert "contribution"

58: Schedule 4, page 68, line 2, leave out "donation" and insert "contribution"

59: Schedule 4, page 68, line 4, leave out "donation" and insert "contribution"

60: Schedule 4, page 68, line 9, leave out "donation" and insert "contribution"

61: Schedule 4, page 68, line 13, leave out "donation" and insert "contribution"

62: Schedule 4, page 68, line 19, leave out "donation" and insert "contribution"

63: Schedule 4, page 72, line 10, at end insert—

"( ) lends money to another otherwise than on commercial terms;"

Amendments 40 to 63 agreed.

Amendment 64

Moved by Lord Goodhart

64: After Schedule 4, insert the following new Schedule—

"SCHEDULETax relief on donations

1 To obtain tax relief under section (Tax relief on donations), the conditions set out in paragraph 2 must be satisfied.

2 (1) The individual who made the donation is a permissible donor.

(2) The registered political party to which the donation is made is a party which, at the last general election preceding the donation, had at least two members elected to the House of Commons.

(3) Conditions A to F in section 416 of the Income Tax Act 2007 (c. 3) (meaning of "qualifying donation") would have been met if the donations had been made to a charity.

(4) The donor has given a declaration in the manner specified by regulations made by the Commissioners for Her Majesty's Revenue and Customs and containing any information and any statements required by regulations.

3 Regulations made under paragraph 2(4) may provide for declarations—

(a) to have effect;

(b) to cease to have effect;

(c) to be treated as never having had effect,

in any circumstances and for any purposes specified by the regulations.

4 Regulations made under paragraph 2(4) are subject to annulment pursuant to a resolution of the House of Commons.

5 Tax relief in relation to donations given by an individual in any fiscal year may be given only on whichever is the lesser of—

(a) the amount of donations given by the individual in that year to which section (Tax relief on donations) applies;

(b) £500.

6 Tax relief shall not be given on higher rate income tax.

7 The amount of tax relief (subject to paragraphs 5 and 6) shall be computed and allocated to the political party to which the donation was given as if that party was a charity to which Chapter 2 of Part 8 of the Income Tax Act 2007 applies."

My Lords, I wish to test the opinion of the House.

Division on Amendment 64

Contents 83; Not-Contents 129.

Amendment 64 disagreed.

Amendment 66 not moved.

Amendment 67

Moved by Lord Tyler

67: After Clause 17, insert the following new Clause—

"National spending limit

In the Representation of the People Act 1983 (c. 2), after section 75A there is inserted—

"75B National spending limit

(1) A registered political party may spend in total, including expenditure by its national, regional, local or other organs, no more than £100 million on qualifying expenditure in the period of 61 months following a general election.

(2) If more than one general election occurs within 61 months following the previous general election, the Secretary of State may by order increase the sums referred to in subsection (1) by any appropriate amount.

(3) Before making an order under subsection (2), the Secretary of State shall consult the Electoral Commission.

(4) An order under subsection (2) must be laid before, and approved by a resolution of, both Houses of Parliament.""

My Lords, we now turn to the discussions that have taken place over many years about constraint on spending by political parties at both the national and the local levels. In case the Minister feels that this is not a relevant or topical issue, perhaps I may refer to the fact that today UNISON, Britain's second largest union, has decided not to make any further contributions to the Labour Party for the time being. Therefore, constraint on expenditure by political parties may be more relevant than it was just a few hours ago. Perhaps I should also remind the Minister that, in the last three months recorded by the Electoral Commission, Labour managed to raise £2.8 million but the Conservatives raised £4 million. The Minister may like to comment on that discrepancy and think again about whether implementation of the agreements arrived at during the cross-party talks under the auspices of Sir Hayden Phillips may be more appropriate.

Amendments 67 to 73 would, in effect, all implement the concerns and proposals discussed at such length by the Hayden Phillips team. Although spending limits were debated in Grand Committee, the Minister will acknowledge that we have responded in these amendments to some of the criticisms made during that process. We have returned to the amendments proposed in the other place, which more closely reflect the Hayden Phillips proposals. The amendments differ in only one respect: the spending limit that we suggest over a period is £100 million, rather than the £150 million in the Hayden Phillips discussions. That reflects some of the anxieties that have been expressed—not least in the previous debate by the noble Viscount, Lord Tenby, who spoke from professional experience of the marketing and advertising industry—about how much wastage takes place. We believe that it would be reasonable to think of a more modest target, which would also meet some of the anxieties of the public.

I do not propose going through all the specifics of the Hayden Phillips proposals, which are directly reflected in the amendments before your Lordships' House. However, I should like briefly to refer to the conclusions of that team, which I again remind the House reflected the anxieties, concerns and intentions of all three parties and for which, at the time, there was explicit support not only in the Hayden Phillips team but also in the House of Commons. Mr Maude, whose comments I referred to in the previous debate and will not repeat now, was absolutely explicit that the recommendations should be incorporated as soon as possible, while in exchanges during Prime Minister's Questions in December 2007 the Prime Minister and the leader of the Conservative Party also specifically endorsed the proposal that there should be limits on expenditure.

In his summary, Sir Hayden Phillips states:

"I believe there is general agreement that: expenditure on general election campaigns has progressively grown and should now be reduced in line with a new spending control regime to be agreed between the parties; and controls on expenditure by all third parties should be strengthened ... This chapter has described the options available to the parties in crafting new controls on spending. To reach a lasting agreement, there needs to be a focused discussion on four key issues: the period over which spending should be limited; the categories of spending which should be limited; the geographical scope of the limits on spending; and, in the light of the nature of an agreed scheme, the amount by which spending should be reduced. But it is clear to me that progress must be made on this point and that a new approach to curbing expenditure is necessary. A comprehensive agreement on party funding should, at a minimum, include within it measures to return to the overall rise in party spending to the trend line as it was before the spike in spending prior to the 2005 general election".

I turn now to a specific issue that again we have modified somewhat from the proposals we put to the Grand Committee; it relates to permissible expenditure. We are clear that at the moment there is a temptation for national parties effectively to interfere with constituency campaigns in a way that is contrary to all the intentions and legislation going right back to the 1883 Act. That temptation relates to specific approaches made to individual electors on behalf of a national campaign and seeks effectively to undermine what is going on in the individual constituency.

Many of us who took part in the Grand Committee proceedings have been candidates at various stages. I added up the number of occasions on which I have been a candidate for a county or general election and it is rather a large number, but on every occasion my agent was able to say to me—others will have had this experience—"If you go over the expenditure limit that has been imposed on this constituency, you as the candidate or I as the agent will be in court". It was laid down absolutely and precisely that those who fought a constituency campaign should bear the full legal responsibility for all the money spent on promoting the candidature.

However, by means of mailshots directed at individuals—let alone all the other material that can come from a national headquarters—a principle that has been in place for more than a century has been effectively undermined. Therefore, we have included a specific requirement in these amendments that, where national expenditure takes place to promote, effectively, a candidate and his or her party within a constituency directly related to an individual elector's response, that should be taken into account in relation to the limits on expenditure at the local level. We understand that this is difficult where, for example, billboards are used; in Chester, for example, it might be said that billboards apply to the whole of Cheshire, because people go in and out of the city. However, where unsolicited mail is sent to an individual elector, that undermines what is happening at the local level and the responsibility of the candidate and his or her agent to look after very precisely what expenditure is made on behalf of that candidate. That is included in the eligible expenditure categories within this section.

I do not need to say much more at this point. There has been considerable discussion at all stages of the process through your Lordships' House and some discussion in the other place, but I plead with the Minister to take this seriously. Indeed, perhaps on this occasion he might be permitted a little bit of a partisan approach, as it is his party that is suffering most from this attempt to get around the law on the way in which expenditure is advanced.

It has also been the experience in recent years that expenditure during the three weeks or so of the campaign is but part of the total campaign expenditure. That has been the cause of much concern and controversy, certainly in the analysis undertaken by Mr Peter Bradley, the former Member for the Wrekin, who was the unfortunate victim of a huge amount of money being spent in his constituency on behalf of his opponent before the dissolution of the last Parliament.

This is an important issue. There has been considerable agreement across the parties, with all three leaders agreeing that something needs to be done on this score. I hope that we will not have yet another example of the St Augustine syndrome: let us all be virtuous, but not yet. I beg to move.

My Lords, these amendments are in the same vein as the previous group that we discussed. I can therefore keep my comments fairly brief, because most of the points have been covered.

The noble Lord, Lord Tyler, referred to being virtuous, but not yet. He might say that to his own party on the question of the donation of £2.4 million. This is a germane point and the people watching this debate or reading it in Hansard need to have it placed in context. It was a significant donation from a foreign national, a fugitive from justice in the UK, which was made to the Liberal Democrats, who refuse to repay it. If the Liberal Democrats feel so passionately about being virtuous, why not repay it? If the noble Lord will make that pledge I shall happily give way to him in order that he may do so.

My real point on spending preferences is that in a fair and democratic situation we need to have a level playing field. However, that level playing field—I alluded to this in my previous comments—has been distorted by the amount of public money that has been poured into constituencies. The office costs allowance, which I mentioned, and the communications allowance could amount to something in the region of £100,000 per year, or £500,000 during the lifetime of a Parliament. That money is put in by the incumbent and is in addition to all the benefits and opportunities that he or she has of writing letters and access to the press.

My Lords, the noble Lord seems to be repeating what he said in the debate on the previous group. Regardless of what one thinks about the £10,000 a year communications allowance—I would be in favour of scrapping it—does he really believe that there is a proper comparison between the £10,000 per year communications allowance that an MP receives and the much larger amounts of money with which the Conservative Party is swamping some constituencies?

My Lords, the direct answer to the question is yes, I do think that there is a comparison. That is why I am making the case.

My Lords, does the noble Lord, therefore, not think that the Conservatives ought to be matching that £10,000 with £10,000 of their own money and not a penny more?

My Lords, I was intending to go on to talk about all the additional benefits that the incumbent has in contesting an election. If the noble Lord is so passionate about limiting the amount of money that can fund campaigns, I think, having been around a few campaigns myself, not least by-election campaigns, that the Liberal Democrats could take the lead and show their virtue by imposing a restraint now on the amount of funds that they are going to put into the Norwich North by-election. They could do that if they really wanted to take the big money out of politics.

My Lords, I quote from the Companion:

"A member of the House who is speaking may be interrupted with a brief question for clarification. Giving way accords with the traditions and customary courtesy of the House ... Lengthy or frequent interventions should not be made, even with the consent of the member speaking".

We are on Report.

My Lords, I will humbly continue the debate. I recognise the rules of the House and would not want to trespass on them.

I was talking about the amount of money that is going into elections and the need for a spending cap. This is the point that my right honourable friend David Cameron has made in his personal pledge: an incoming Conservative Government would abolish the communications allowance as a first step and a gesture in that direction. We would seek to reduce the cost of politics and the size of the House of Commons. He has put his finger on the national mood at the moment, which is not inclined to put one penny more towards the political process in these straitened times but wants to see the system managed much more efficiently. It is up to the political parties, through interparty dialogue, to come up with ways in which that can be achieved.

I would like to make a couple of other points about expenditure limits. There are many other forms of support that political parties receive from the public purse, a point that was raised in the Neill report and was touched on by Sir Hayden Phillips in his review, where he pointed out the value of freepost mailings of manifestos at election time and of political election broadcasts. Significant amounts of funding are there for the incumbent.

We are not saying that there is not a problem; big money—I use the term again with no hesitation—needs to be taken out of politics. "Big money" refers not only to trade unions and major wealthy individuals but to the public purse as well. Some steps have been taken and it is worth putting on the record some of the progress that has been made in relation to national limits. We have just experienced a European election that had a national limit on expenditure. That was a good exercise and a good discipline to impose.

The very Bill that we are talking about came forward with a limitation on pre-candidacy election expenses for certain general elections. It introduces a limit, which is a step in the right direction, as it acknowledges that we have to find ways of reducing the amount of funding that is going into constituencies. Section 18 talks about a system of limiting the amount of money expended, kicking in after the 55th month of a Parliament.

However, there is an important corollary to the point about the limitations on pre-election expenses under the Bill. I would be grateful if the Minister could put some additional remarks on the record about this. The understanding was that that would be matched by a limitation of the communications allowance used during that period by Members in the other place in their constituencies. It seems only right and fair that any limit that applied to donation income should be matched by a gesture from the incumbent Members in limiting the amount that is spent through the communications allowance. Various statements have been made claiming that such a statutory instrument or convention would be in place by the time the Bill received Royal Assent. It would be good to hear that this is still very much the Government's intention. I recognise the intention behind the amendments but, for the reasons that I have outlined, we do not want to support them at this stage.

My Lords, this group of proposed amendments seeks to introduce a radical change in the regulation of political expenditure in this country. I pay tribute the noble Lord, Lord Tyler, and the, alas, not present noble Lord, Lord Rennard—whom we hope is getting better—for their passion and commitment to this particular point about national spend and constituency spend. I am unable to accept the amendments, but I hope that what I have to say will go a little way towards making the noble Lord realise that we want to move forward on this.

I will not go through the amendments one by one. The noble Lord did not do so either. We recognise the broad shape of the amendments from Grand Committee. We are grateful that some rectification has been made of some of the problems and deficiencies that were identified in the previous versions of these amendments, but we have some concerns. For example, Amendment 67 would impose a five-year limit on a party's spending but still fails to anticipate the problem of parties saving up the majority of their permitted spend until shortly before an election. In Amendment 68, we are concerned that smaller parties would face great difficulty in accurately calculating the level of their permitted spend, given that it cannot be known how many months will elapse between elections. These are small points, but I make them in case the noble Lord wants to deal with them.

The transitional arrangements proposed in Amendment 70 appear to suggest that a party could spend 75 per cent of the permitted £61 million between July 2009 and the next election. That is probably a drafting error, but prescribing any figure in the manner of the amendment would be risky, given that we cannot know exactly when the election will be. Amendment 72 would require registered political parties to report annually on their qualifying expenditure under the proposed new system of spending limits, although it defines expenditure as that found in Schedule 4A to the 1983 Act. However, that schedule lists the regulated matters for the candidate's spending limit, not the party's campaign spending limit. That list of regulated matters is to be found in Schedule 8 to the 2000 Act.

Amendment 71—and here I come to more major issues—would make two crucial changes to the list of regulated matters for candidates' spending, as set out in Schedule 4A to the 1983 Act. First, it seeks to add spending on newsletters or similar publications, which is by the central party but relates to candidates. Secondly, it would add market research or canvassing activity to the list of regulated matters. The noble Lord, Lord Tyler, raised concerns about the current list of regulated matters for the candidate and campaign spending limits in Grand Committee. Election spending is, of course, regulated by separate limits, according to whether it is by or on behalf of a party, or by or on behalf of a candidate. This is clearly an important distinction. The noble Lord's concern is that spending by a central party organisation, which might be specifically aimed to enhance the electoral prospects of an individual candidate, would not be recorded against that candidate's spending limit.

So we understand the point and the noble Lord's concern, but we fear that the proposals would introduce further complexity into what is already a complex area of legislation. We are concerned that they could be difficult to understand and operate in practice and could blur the respective roles and responsibilities of the election agent, central party and local party.

In the White Paper that preceded this Bill, the Government stated that they would assess whether there is clarity over which expenses count towards the party campaign and candidate spending limits. We stated that we would bring forward proposals to update the lists of regulated matters. However, such changes would be made via secondary legislation rather than in this Bill.

The Government will consult fully with all the major political parties and the Electoral Commission before bringing forward proposals for change. Any proposals would then be subject to full scrutiny by both Houses. The concerns that the noble Lord, Lord Tyler, raises and the changes that he proposes to make to Schedule 4A would best be addressed during the course of that consultation and those discussions. I understand that there is due to be a meeting of party administrators and officials from my department, the Ministry of Justice. This could be a productive issue to be considered at that meeting, which I believe is due to be held later this summer.

This is a complex area of legislation and any proposal for change would have to be considered very carefully if we are to avoid the unintended consequences that are always a danger of introducing changes that have not been sufficiently considered. I can give no guarantee that it will be possible to address fully the noble Lord's concern, not least as his proposal would be a significant change and we have concerns about the practical effect of such a step. However, I reassure him that we intend to look at the lists of regulated matters, and to do so not on a solitary or party basis—although he tempts me, I shall resist the temptation to be parti pris—but on a consultative and co-operative basis.

To return to the main thrust of the debate, which we are grateful to the noble Lord for raising, this group of amendments is based, in a broad sense, on the package of recommendations on spending put forward by Sir Hayden Phillips, although there are some key differences between Sir Hayden's suggested reforms and the amendments before us today. The noble Lord, Lord Tyler, mentioned the key one. Sir Hayden proposed that the whole of term limit should be £150 million, including a general election premium of £20 million. Sir Hayden's proposals for the treatment of smaller parties also differed, and he did not propose introducing the new controls until after the next general election. These differences are significant. We are not considering the Hayden package of reforms with these amendments, but a revised version which has not come about as the result of cross-party talks and discussion.

We have constantly stated that we broadly support the approach of comprehensive spending limits as proposed by Sir Hayden. However, we have also made it clear that there are concerns about how these could be made to operate effectively in practice. I talked about a meeting of officials and party administrators. Such a meeting has not yet been arranged but we will seek—I give that promise from the Dispatch Box—to arrange a meeting of the type I mentioned to take place this summer.

We have also made the case—I know that the noble Lord, Lord Tyler, is not particularly happy with this—that it is necessary to proceed in this area only on the basis of cross-party consensus. We do not think that we can introduce fundamental changes to the regulation of party funding unless all the main parties are signed up to the way forward. That requires detailed discussion between parties and scrutiny of any proposals for change. That is what the Sir Hayden Phillips talks sought to achieve. Alas, they failed to settle on proposals that all parties could support.

We have always said that this Bill is not intended to be the last word on party funding issues. We hope that, in the long term, cross-party agreement can be achieved. We do not believe such agreement exists in your Lordships' House today. For that reason, we do not believe that this Bill is the correct place to introduce such a system. I hope the noble Lord will consider withdrawing his amendments on the basis of what I have said in my reply. The noble Lord, Lord Bates, mentioned the restriction post-55 months. My right honourable friend Michael Wills said on Report in another place that CA would be restricted for the longer regulated period introduced in Clause 18. That is a matter for the House of Commons to agree, not for the Government.

My Lords, I am grateful to the Minister for the very careful and positive way in which he has responded to our amendments. I am sorry that his colleague, the noble Lord, Lord Campbell-Savours, is not in the Chamber, because he was so effective in demolishing this argument that everything has to be agreed by total consensus across the parties. I wonder what the Minister's position would be if there was complete agreement between the Conservative and Labour Parties on an issue of this sort, but the Liberal Democrats did not agree. Would he still say that there was consensus, or would he say that the Liberal Democrats effectively had a veto on any agreement? The danger with the concept that we can do something in this field only when everybody is agreed is that we will not make any serious reforms to our political system at all. There will always be somebody who does not want to move. I have to say that we are usually rather more in advance when it comes to reform. However, this idea that consensus is essential, and therefore the slowest mover has a veto, is a dangerous new tendency in government. I do not see it in any other walk of life where government seeks to interfere or control.

I hope I am not putting words into the Minister's mouth, but I think that I can detect from what he is saying that the Government take very seriously the sort of anxieties and concerns that we have expressed. He did not say that he is seeking to reconstitute any cross-party discussions but I hope that it can be read into his words that he is not giving up on seeking to achieve some agreement, even if it is not complete, 100 per cent consensus. As he rightly says, his colleagues in the other place are increasingly anxious about the failure of the present regulations, particularly in terms of qualifying expenditure, to prevent interference on a scale that has never been experienced before. Not in the past 100 years has there been such considerable expenditure by national parties to encourage people to support local candidates within the constituency. He was very generous in identifying that this was an issue of concern which the Liberal Democrats are not alone in identifying. He is right that we need in some form or other to go back to the issues in Schedule 4A, and it may not be our precise amendments that will be necessary.

I know that the noble Baroness, Lady Gould, who is engaged this afternoon and has given her apologies to me and perhaps also to the Minster, shares our anxieties on this score. If the Minister is saying—I think he is, and I hope he will intervene if I have it wrong—that there may be other ways in which we can tighten and improve how these categories of expenditure are currently treated, then my colleagues and I very warmly welcome that. Frankly, however, it is not very helpful simply to say that there will be an urgent meeting some time in the summer. That does not communicate to me the sense of urgency that even this House would feel in giving priority to this important issue.

The Minister has been generous in saying that these are matters of concern to him and his colleagues in government. I hope it will be accepted that the issue is certainly of concern to members on different sides of the House. It did not sound as though even the noble Lord, Lord Bates, speaking on behalf of the Conservatives, is really totally satisfied with the lack of clarity. In the mean time, I take at face value precisely what the Minister has said. I hope we will see some progress, outwith the discussions on this Bill, before the Summer Recess. On those terms, I beg leave to withdraw Amendment 67.

Amendment 67 withdrawn.

Amendments 68 to 73 not moved.

Amendment 74

Moved by Lord Norton of Louth

74: After Clause 20, insert the following new Clause—

"Abolition of the edited electoral register

Following the publication of the 2011 edition of the edited version of the electoral register, the provisions of section 9 of the Political Parties, Elections and Referendums Act 2000 (c. 41), in so far as they relate to the edited version of the register, shall cease to have effect, and no further edited versions of the register shall be compiled and published."

My Lords, this is the first amendment I have moved that has been the subject of a campaign; I have received a number of e-mails urging me to oppose it. I fear I must disappoint the correspondents.

The purpose of the amendment is to get rid of the edited version of the electoral register, though providing time to do so. In seeking to abolish the edited register, as I explained in Committee, I am in good company. Support for abolishing it comes from the Association of Electoral Administrators, the Electoral Commission and the Information Commissioner. The Thomas-Walport report last year on data sharing recommended that it be brought to an end, stating,

"we feel that selling the edited register is an unsatisfactory way for local authorities to treat personal information. It sends a particularly poor message to the public that personal information collected for something as vital as participation in the democratic process can be sold to 'anyone for any purpose'. And there is a belief that the sale of the electoral register deters some people from registering at all. We are sympathetic to the strong arguments made by the Association of Electoral Administrators and the Electoral Commission that the primary purpose of the electoral register is for electoral purposes".

The arguments for abolishing the edited version rest on principle and practice. The principled argument is, to my mind, compelling. Heads of households are required, by law, each year to complete an electoral registration form in order for those in the household to be registered to vote. That is a fundamental part of our democratic process. Yet at the same time they have to decide whether they wish to have their name withdrawn from a register that is compiled for sale to any body that wishes to purchase it. People can exercise their option to opt out—it is opt-out, rather than opt-in—but why should they be required, by law, to make such a determination? It completely sullies the integrity of the electoral process. The electoral registration form should be solely for the purpose of compiling the electoral register. I thus have a principled objection to using the force of law to impose this burden on citizens.

The practical argument is that the present situation imposes a major and, to my mind, unnecessary burden on electoral registration officers. They are required to compile the information and then sell it. They make no profit in doing so—rather the reverse. There is no benefit to the local authority. There is certainly no benefit to electoral registration officers; it has no relevance to their role. Compiling the edited version of the register imposes a major burden. It will become even more of a burden as electoral registration officers prepare for the move to individual registration. We should be facilitating that move, not maintaining a significant burden. On practical grounds, the case for getting rid of the edited register is thus greater than ever before.

What are the arguments against? In Grand Committee, the Minister focused solely on practical arguments. There was no engagement with the issue of principle. The argument related solely to the benefit for organisations that purchase the register. Abolishing the edited register may create problems for them. The Government plan to consult on the issue.

There are two, related responses to this. First, my amendment provides for the edited register to cease after the 2011 edition. There is thus time to prepare, and indeed to consult. The Government can utilise their proposed consultation on the best way to ensure a smooth transition. The principal objections to abolishing the edited register appear to come from debt collection agencies that use it to track down debtors who have moved. Given that 40 per cent of electors opt out of the register—one suspects that those in debt may be among them—that strikes me as an inefficient way of proceeding. Credit reference agencies already have access to the full register to check the names of people applying for credit. As the Credit Services Association points out, it is illogical that the Ministry of Justice supports the continued use of the full register by credit reference agencies to check the names and addresses of people applying for credit, so helping them to get into debt, but not for the process of recovering sums borrowed and helping people to get out of debt. I am not against agencies being able to utilise the full register for that purpose. As the Credit Services Association quite justifiably points out in its briefing:

"Desired access to the electoral roll by the direct mailing and marketing industry should not be linked with the completely different requirements of the debt collection industry".

I concur. I would be content for the agencies to have access to the full register and would support the Government in making the necessary adjustments for that purpose.

Secondly, as my noble friend Lord Bates observed in Committee, if there is demand for such a product by direct mailing and marketing bodies, market forces will take care of it. My amendment allows time for the market to operate. This is clearly something appropriate to the market and not to misusing statutory provisions for commercial purposes.

My basic point is straightforward. The process of employing the force of law to compile the electoral register should be confined to that task. Electoral registration officers should be allowed to get on with their tasks as electoral registration officers. They are not, or rather should not be, in the business of helping junk mail companies. Given that the costs of compiling the edited register are not wholly recovered, we are in effect subsidising commercial concerns. We are doing so through the use of statute, through the use of a provision that is fundamental to the democratic process. Requiring people to decide whether they wish to remove their name from the edited register is a misuse of that process. We should restore the integrity of our electoral registration process. We certainly should not use it to subsidise commercial concerns.

Other democracies manage to survive without such an edited register. Their economies do not appear to be undermined by the absence of such a register. We should get rid of it. It is in principle objectionable and it imposes an unnecessary burden. I beg to move.

My Lords, I support my noble friend. I have been astonished by the amount of paper that I have received on this amendment from the Finance and Leasing Association, the Credit Services Association, the Institute of Fundraising and the UK Cards Association opposing him—I also received something from the Electoral Commission supporting him—so I listened carefully to what he had to say.

My concerns are primarily threefold. First is the civil liberties argument. I am always concerned about information being collected for one purpose and then being passed on to be used for another, and my concerns have been increased by the examples given by my noble friend. The second is what I might describe as an ecological argument; that is to say, I suspect that what we are allowing here increases the volume of junk mail that travels through all our letterboxes. It is unnecessary, untidy and wasteful of our resources. The third is what I describe as the economic argument. I understand that the information is provided at cost, and I do not see why there should not be an economic charge for it, which would at least reward the local authorities and those involved for the expense, trouble and management time required to provide it. That does not happen at present; therefore, as my noble friend pointed out, this is a subsidising of the private sector by the state, which is inherently undesirable.

My civil liberties argument is the most critical. We should make every effort to ensure that information collected is used for the purposes for which it is collected, and not passed to somebody else for use in a completely different way. Although the Electoral Commission says that it has worries about the drafting of the amendment, it strongly supports it. And given that the Minister has so often in the past prayed in aid the Electoral Commission when rejecting our arguments, I hope that on this occasion he will see the logic of its position and ensure that my noble friend's amendment is accepted.

My Lords, every possible argument in favour of this extremely sensible proposal has been put forward by my noble friends. By rising to speak, I give the government Front Bench an opportunity for information to arrive from the distant corners of the Chamber. I declare that I am a foot soldier in the army commanded by my noble friend Lord Norton.

My Lords, in Committee my noble friend Lord Henley and I tabled an amendment that was similar in effect because we were persuaded by the argument put forward. The principle was very clear and has been ably articulated by my noble friend Lord Norton of Louth.

It covered two pieces of very persuasive evidence. The first was the intervention of the Information Commissioner, Richard Thomas, and Mark Walport, director of the medical charity the Wellcome Trust, who, in their report published in July, said:

"The edited register is available for sale to anyone for any purpose. Its main clients are direct marketing companies and companies compiling directories".

The point of this amendment is to make it clear that one must opt into the edited register and thus make it harder to sell information on to third parties.

In addition, the Local Government Association carried out a survey of electoral registration officers, 98 per cent of whom wanted a change in the law to abolish the edited register that councils have to sell to direct marketing companies, and 88 per cent of electoral registration officers believed that the current system deters people from voting. The survey also found that councils raise on average only a mere £1,900 from this source.

Putting together all of those arguments that were so eloquently persuasive, I rose in Grand Committee and asked whether this was not an opportunity for a change. I should have realised that although taking on various groups is perhaps necessary in the course of public life, taking on direct marketing companies is a recipe for being inundated with e-mails, paper and representations. They certainly lived up to the reputation of their direct-marketing capabilities by making representations in between the Grand Committee and now.

I totally support the principal point of the more reasoned amendment put forward by my noble friend Lord Norton of Louth which delays implementation of the abolition. Direct mailing companies need to be aware and acknowledge that there is grave discomfort at the information being passed on for marketing purposes. They need to start thinking in the medium term about finding other sources from which to garner this information.

However, we keep coming back to timing, which is everything. At present, the representations that we have received from the organisations that would be most affected by this measure have led us to a deeper concern about the impact on jobs and businesses in this country. At times of recession, when many people are losing their homes and jobs, and many businesses are closing for many reasons, we should take almost a hippocratic oath, which is, "First, do no harm". My hesitation is not about the principle of the amendment but that at a practical level we may actually harm an important part of the economy.

Therefore, while we very much support the principle of the amendment and urge the industry to take notice of the remarks made in this House, and to look for alternatives, we would not be able to offer support from the Front Bench to my noble friend.

My Lords, I want to reiterate the point made by my noble friend Lord Rennard in Grand Committee when we supported the noble Lord, Lord Norton of Louth. I quote from the Grand Committee on 6 May. My noble friend said that,

"the purpose of the electoral register is democracy and the purpose of political parties is to promote their messages legitimately. It is not right that someone who registers to vote should then have to consider whether they should receive junk mail".—[Official Report, 6/5/09; col. GC263.]

The register was never intended for that purpose and the noble Lord, Lord Norton of Louth, has made a persuasive case for looking very seriously again at the whole purpose of the electoral register.

My Lords, I am grateful to the noble Lord, Lord Norton of Louth, for his amendment and for the way in which he has changed some of the wording between Grand Committee and now. It is right to point out that the Electoral Commission states:

"While we support the intention of Amendment 74 in the name of Lord Norton of Louth, which aims to end the compilation and publication of the edited version of the electoral register, we have strong concerns about the drafting of the amendment".

I hope, therefore, that the noble Lord, Lord Hodgson, will accept that when the Electoral Commission is absolutely in favour of what the Government want, I quote it; but I also try to do so when it is not. To be fair, that is exactly the comment that the commission made on this issue.

My Lords, I did say in my remarks that the Electoral Commission had concerns about the drafting of the amendment. I was not trying to say that the commission was 100 per cent behind it. I think that I made that perfectly clear.

My Lords, the noble Lord is being fair; I hope he thinks that I have been fair in response.

This amendment introduces a new clause, whereby after December 2011, Section 9 of the Political Parties, Elections and Referendums Act 2000 in relation to the edited register will no longer have effect, thus preventing any use after that date of the provisions that allow for the compilation and publication of the edited version of the electoral register. EROs would no longer compile an edited version of the register for sale to anyone for any purpose. Historical versions of the edited register, including the final version published on 1 December each year, would still be available.

We have been reminded that in July 2008, Dr Mark Walport and Mr Richard Thomas published their report, the Data Sharing Review, which made a number of recommendations to the Government. In particular, recommendation 19 called for the edited version of the register to be abolished. We indicated that we would consult on this proposal and that remains our intention.

The Government clearly understand the concerns around the sale of personal details through the supply of the edited register. As my noble friend Lord Tunnicliffe stated in Grand Committee, before we can consider taking forward recommendation 19 there is a need to establish how removing the provisions would impact on the UK economy, businesses, charities and the general public. Indeed, noble Lords may be interested to hear that evidence to date indicates that a wide variety of organisations use the edited register and there could be an economic impact—even a significant economic impact—if it were no longer available for sale. For example, the direct-marketing industry has indicated that it would be hard hit if the edited register were abolished. It is worth pointing out that direct mail is worth £8.6 billion to the UK economy and accounts for 182,000 jobs.

We must not neglect the very real potential impact on charities. They are of course suffering, as are businesses, in the current economic climate. Direct mail remains a significant form of direct marketing for charities. The Institute of Fundraising has told us that it relies on the edited register for this purpose. A piece of research was carried out by nfpSynergy in 2008. Based on the responses from more than 100 charities, the level of income generated from existing donors—those acquired through direct mail—sits at around an average of 27 per cent of the charities' total income. Charities would face poorer quality direct marketing lists and lower response rates if the edited electoral register was no longer available for sale. If charities are unable to verify addresses accurately, there is more chance of mail being addressed wrongly, which could lead to a reduction in the inclination of potential donors to donate. We think other impacts need to be taken into account.

In the absence of the edited register, direct mailing organisations may rely on out-of-date information, thus increasing the risk of wrongly addressed correspondence. Direct marketing companies may start to rely on more intrusive methods of marketing, such as cold calling. The Royal Mail benefits substantially from income from advertising mail. Out of a £7 billion a year turnover, £1.7 billion represents delivering and advertising mail to the Royal Mail. This might be impacted. Those are powerful arguments, particularly in the economic times we are living in.

Having said all that, we accept that there are strong principled arguments in favour of abolishing the edited register. We are sympathetic to those who argue on principle, as does the noble Lord who moved the amendment, that data collected for electoral purposes should not be sold on for commercial purposes. We are also concerned that the existence of the edited register may put some people off registering to vote. That runs contrary to our programme of work to bolster registration ahead of the introduction of individual registration. It is something we wish to consider carefully.

While we have collected some evidence to date, a full consultation would allow us to go out to a wider audience, including businesses, charities and the public. We feel that this would enable us to build up a firmer evidence base and better understand the nature of the impact of abolishing the edited register. It is our intention to conduct a consultation before the Summer Recess in order to build a firmer evidence base about the advantages and disadvantages of the edited register and to consider the way forward on the basis of the responses received.

I should like to emphasise that an amendment to this Bill is not the only legislative mechanism, in our view, by which the provisions for the edited register may be removed. The edited register exists because of provision in secondary legislation, made under paragraph 10(1) of Schedule 2 to the Representation of the People Act 1983. There is no requirement that secondary legislation should include provision about an edited register. Accordingly, our argument is that it would be possible to remove the provision for the edited register by using existing powers to amend secondary legislation, if that was deemed appropriate.

Therefore, it would be open to the Government to use this mechanism to remove the edited register if, following consultation, it became evident that that was the best way forward. That would still leave the power to create the edited register again on the statute book. Nevertheless, it might achieve the benefits that noble Lords describe and would be a more flexible approach. This would allow us to have the benefit of fully considering the outcome of the consultation before taking further steps. Notwithstanding our sympathy for the arguments against the edited register, this should be the preferred approach and proper process for making this informed policy decision about changes to our system of electoral administration. I am not making any commitments on behalf of the Government, as I would not wish to pre-empt the outcome of any consultation. I mention this solely to emphasise that this Bill may not be the only mechanism by which the provisions relating to the edited register may be amended.

I hope that those who support the amendment might give careful consideration to the impact of accepting it. I repeat that, in principle, we understand the motivation behind the amendment, but we argue that it would not be appropriate to abolish the edited register via an amendment to this Bill before we had conducted a public consultation in full. The noble Lord will take whatever course he thinks best. However, I hope that some of the arguments that I have tried to employ might gave him some food for thought.

My Lords, I am grateful to all those who have spoken. In addition to the bodies I mentioned that support abolition, there was cross-party support for it in Grand Committee. I am very grateful for this afternoon's expression of support from my noble friends Lord Hodgson and Lord Brooke and the noble Lord, Lord Tyler.

I am grateful for the Minister's response. It came more towards meeting the point of principle this time rather than relying solely on the practical point. I have two concerns about what he said. He has repeated the point that the Government propose to consult. They have been proposing to consult for some time. The Government could have already had the consultation exercise and got the responses by now. There does not appear to be any great urgency on the part of the Government.

That brings me to the second point. The Minister has said, quite rightly, that one could get rid of edited registers through existing legislation; the provisions are there. He said that that is the more flexible approach. My concern is that it is flexibility in favour of doing nothing; that would be my worry. I feel that there is a need for something to be locked in to ensure that there is action. I think ultimately the issue of principle is paramount.

I will reflect on what the Minister has said. However, my greatest concern is, as my noble friend Lord Hodgson said, the concern expressed by the Electoral Commission in relation to drafting. I want to reflect on that. However, I will reflect on what the Minister has said and consider whether to return to the issue at Third Reading. In the mean time, I beg leave to withdraw the amendment.

Amendment 74 withdrawn.

Amendment 75 not moved.

Amendment 76

Moved by Lord Tyler

76: Clause 21, leave out Clause 21

My Lords, this is an important issue not least because, as yet, Members of the other place have had no debate on it. Those who were present at Second Reading, as well as those who have taken part in the discussions in Grand Committee, will recall that this is the question of the exclusion from the ballot paper of the candidates' addresses. By some special arrangement, this was put to the other place without any debate, out of sequence and not in the group to which it related. I need go no further.

There is an important principle here, which is similar to the principle that the noble Lord, Lord Campbell-Savours, enunciated on Monday, in relation to the amendment that we had both put before the House. This is an issue that the House of Commons should debate, but it will not be in a position to do so unless we pass our amendment tonight; if we do not do so, the clause will stand in the Bill undebatable.

The suggestion has been made that somehow this issue is not appropriate for your Lordships' House because it wholly relates to Members of the other place. That is not so. It relates to all candidates who wish to stand for the other place. It is therefore perfectly appropriate for your Lordships' House to take a view on this issue. That is the first illusion that I must seek to dispel.

There are other misunderstandings, too. It has been suggested that somehow this is an important issue to deal with because there is some sort of new security risk. Frankly, as those who have had the experience of standing as candidates will know, you do not have to put your name on the ballot paper for your address to be well known in your area by other means. If there was a security risk, no doubt the Government would come forward with some direct evidence from the police or the security services to that effect.

The Government very properly instituted a consultation process on this issue back in November, I think. We now have the response. Only two MPs—on behalf of other MPs, I should say—responded. The Electoral Commission supported the idea that there might be a change in the law. However, electoral administrators, returning officers, the Newspaper Society and, most important of all, the public have made it absolutely clear that they think that any reduction in transparency on this issue would be totally inappropriate and certainly out of favour at the present time. The only political party to make any sort of submission to the consultation process were the Liberal Democrats and we were clearly against withholding addresses in this way.

Of course, there was a vote in the other place. The Lord Chancellor and the Minister responsible for the Bill both voted against this change, which they felt was clearly inappropriate, without proper discussion and debate. The Minister said on a previous occasion that he intends there to be a free vote, rather than a whipped vote, on this proposal. I hope that that is still the case; no doubt he will be able to confirm that.

At the moment, increasing the secrecy that surrounds the political process will seem even more inappropriate than it was when we discussed these matters at Second Reading and in Grand Committee. Frankly, I believe that the public will think it pretty odd if that is introduced for the politicians who may stand for election to the other place—but not, incidentally, in relation to some of the devolved Administrations. You would think that, if there were real pressure for this to happen, it might be in Northern Ireland, where there is a reasonable case for doing this. However, so far as I am aware, there is no such pressure and there is certainly nothing in this clause to cover anyone else at any other level in the political system. I think that the public would regard this as another attempt by the political classes to protect themselves from scrutiny when that scrutiny was thought to be perfectly appropriate for everyone else. I hope that the Minister will now be rather more responsive to that concern than he was able to be prior to the consultation period. I beg to move.

My Lords, the noble Lord, Lord Tyler, will know that unfortunately I dissent from the position that he has taken. I ask him to forgive me because we work together very well in a number of areas of the Bill.

I did not move my amendment because I wanted to concentrate on the essence of the noble Lord's case. This is not about risk to Members of Parliament; the issue in this case is the risk to the families of Members of Parliament. In Committee, I drew attention to two occasions: the first was when a Member of Parliament was in Paris and an incident was about to take place; and the second was the incident that took place outside the home of the noble Lord, Lord King of Bridgwater, when the police were brought in and there were subsequent prosecutions. In the latter case, there was clearly a risk to the family.

I am worried by the fact that the case put by the noble Lord, Lord Tyler, seems to be based on the proposition that, because we are in public life, our families have to take into account the fact that we may be placing them at risk. He was not quite as blunt as that, but that is the implication. I want to give an example. If a person anywhere in the world were to Google the names of every single Member of Parliament—their names and addresses would be available on the internet following a general election campaign—that person would have a database that could be used against each individual Member. They could dispatch from anywhere in the world envelopes containing biological material or other dangerous agents and send them to the homes of those Members of Parliament. The mail that we receive here is screened but we all know that that is not the position with mail that goes to our homes. We are advised at every stage in our political lives to be more diligent and careful with regard to our personal arrangements because of the dangers from terrorism and I cannot believe that a political party would argue that we should not have that in mind when taking decisions on this issue. We cannot place the families of Members of Parliament in that position.

The noble Lord has said that this material is already available. Of course it is. You could have gone to my former constituency in Workington and asked on the streets, "Where does the Member of Parliament for Workington live?", and you would probably have been told the answer within a road or two. However, when you are in some obscure country in another part of the world, you do not have access to that kind of material. When I oppose the noble Lord's amendment, I am referring to a completely different kind of threat.

I am also concerned about the impact of international terrorism on how Members of Parliament conduct themselves in a public place—particularly in the Chamber in Parliament, where their remarks might be heavily publicised. Even though they are protected by privilege, if Members of Parliament feel constrained in any way because of the possible danger to their families that might arise out of any statements that they make in Parliament, I believe that we have a responsibility to try to remove that possibility of constraint. We must place Members of Parliament in a position where they feel confident that what they say will not lead to unnecessary risk to their families.

I am afraid that the remarks of the noble Lord, Lord Tyler, do not really address that. I am sorry to say that, because we have worked together well on this Bill. However, this is an area where we have a fundamental difference of opinion. As I said in Committee, my views on this matter stem basically from the noble Lord's lobby. I supported the principle of absolute transparency that he advocated until I had the conversation with my wife, to which I referred in Committee. She explained what happened in our family during the Iraqi debate in the 1990s, when I was quite involved with the Iraqi opposition.

Now is the time to change the nature of the debate in this area. I appeal to the noble Lord not to press his amendment to a vote today because I think that it sends out the wrong message. For all the goodness that lies in the libertarian values that he and his party colleagues hold, this is one area where I am afraid that too much transparency will place individual Members' families at risk in a totally unacceptable way.

My Lords, when I first read about this amendment in the press, it seemed to me a good one and well worthy of support were it to go to a Division. After all, Enoch Powell—not exactly the most uncontroversial of political figures—always insisted on having his name, private home address and telephone number published in the London telephone directory. Furthermore—this is not so widely known—while he was Member of Parliament for South Down, he always refused to carry a side-arm for personal protection against terrorist attacks, as he was legally entitled to do. Given his military background, he could have used the weapon to good effect in an emergency. However, he refused to do so because he felt that it would be insulting to his constituents, whether or not they were his supporters.

It must be conceded that that was more than 30 years ago. Perhaps the British character has changed since then and, as the noble Lord, Lord Campbell-Savours, has just reminded us, we now have a problem with international terrorism, which hardly existed at that time. So far as the British character goes, there are some who claim that we have become collectively—not individually of course—more emotionally incontinent and much less able, and certainly much less willing, to restrain our words or actions. The rather alarming scenes outside a magistrates' court in Devon a few days ago, when a woman was charged with paedophile offences, was perhaps indicative of this. So, on further reflection, the argument seems to be much more finely balanced, and I am now not so sure that I can support the amendment.

My Lords, I spoke in favour of the amendment in Grand Committee. I remain sympathetic to it and run the risk of incurring the wrath of the noble Lord, Lord Campbell-Savours. I accept that the arguments are finely balanced. I believe that the link between those who seek election and the electorate should be as close as possible. The publication of home addresses is part of that.

At the margin, as we heard in a powerful speech by the noble Lord, Lord Campbell-Savours, there are potential security risks. Yes, it is possible that people will pack packets of anthrax in Pakistan and mail them to individual Members of Parliament, so there is a risk, but it is a risk at the margin.

I am concerned about the other principle addressed by the noble Lord, Lord Tyler, which is that this measure was slipped in without any of the people in the other place having seriously debated its pros and cons. I entirely accept the argument that it is not for us in this House to lay down the terms and conditions under which people stand for election to the other place, but it is important to provide an opportunity to air all the issues, particularly in the light of the difficulties that we are facing at the present time.

The Division Lists at the end of the non-debate that took place were divided across parties; strong views were held in various parts and various parties. It will be important for us to give the other place a chance to debate the issue, to discuss the principles ab initio with tabula rasa. We would not wish to interfere in any way with that, but the debate should take place because it is such an important issue in our democratic system, particularly when that system is under strain. That is why I support the noble Lord's amendment.

My Lords, I shall be brief. At Second Reading, I intervened on the speech of my noble friend Lord Hodgson and asked whether he was including security considerations. It would not be right for me to tell your Lordships' House what my noble friend said to me after the debate was over, but because this debate will be a quarry for any subsequent debate that may occur in the House of Commons, I will add one other consideration as someone who has been under threat. I agree that it is easy to find out where someone lives but, if he or she lives in a block of flats, for example, we are placing at risk all the people who live in that block of flats and not simply ourselves.

My Lords, having listened to the contributions and having found the remarks of the noble Lord, Lord Campbell-Savours, incredibly persuasive and articulate in presenting the case against this amendment, I would not want to and would be incapable of adding anything to what he said. It stands on its own merits.

I will make one brief point on a technicality: the question whether the other place had an opportunity to consider this measure. That is at the heart of our position. There was a vote in the other place. The result was that 235 Members voted in its favour and 176 voted against it. That was a matter of a free vote on the part of the government party and the Conservatives. It was, sadly, the subject of a three-line Whip on the part of the Liberal Democrats. None the less, the Whip was voted against by several of their Members. The argument presented is that the matter was not discussed, but Members of the other place had seen the amendment in the name of my honourable friend Julian Lewis. The debate had continued; most people had an opinion on it and they expressed it in the most important place: in the Division Lobby. As the elected House, they expressed their opinion on a matter that impacts them; it does not impact us in this House.

Our position is that, if that view was taken in the other place and it was the settled view of that House, it would be wrong for us in this place to seek to overturn that from a procedural point of view, not to mention the qualitative and security arguments that have been presented so forcefully in this debate from many sides. Members on our Benches would have a free vote again in any Division, but I hope that we will allow the House of Commons to determine the terms on which they stand for election and respect that.

My Lords, Clause 21 removes the requirements on candidates to provide their full address on statements of persons nominated and the ballot paper at UK parliamentary elections. The clause was inserted into the Bill following an amendment that was tabled by the honourable Member for New Forest East, Dr Lewis, and accepted by the other place at Report following a free vote. The clause provides that, at a parliamentary election, candidates' full home addresses will no longer appear on the nomination paper but will instead be supplied to the returning officer on a separate home address form. A home address form enables candidates to choose whether their full home addresses will be included on the electoral documents available to the public. That is the statement of persons nominated on the ballot paper. Should a candidate prefer that their full home address not be made public, these documents will instead identify the constituency in which the candidate has an address.

The Government issued a consultation paper on 26 November 2008. From the 65 responses to the consultation, it was clear that there are strongly held views for and against changing the legislation. Broadly speaking, a majority of politicians who responded and the Electoral Commission favoured change, while administrators, returning officers and the majority of responses from the public did not. Those in favour argued that the candidate and their families faced more ordinary risks to their safety and security, which warranted the need for their home addresses to be removed from the public domain. By contrast, those against the idea argued that the interest of accountability and free expression of democracy would not be served by allowing candidates to make it more difficult for the public to find out information about them.

As a result of the responses to the consultation and the importance of the issue, we took the view that the matter would be for the other place and not for the Government to decide on—hence there was a free vote on the issue. That allowed those who were elected to make a decision on their behaviour during elections and on the information that should be made available to the public. I reiterate that the Government take no position on the merits of Clause 21 and that the inclusion of the clause in the Bill is not government policy. The Government will therefore allow a free vote on Amendment 76.

My Lords, I am grateful that we have had an opportunity to discuss this important issue this evening. Ever since the Ballot Act 1872, the electorate have had the right to know where their candidates live. I suggest to your Lordships' House that we should take seriously any reduction in that transparency—hence my anxiety, which I am disappointed that the noble Lord, Lord Campbell-Savours, does not share, that the other place should debate the issue. That was the issue on which he and I agreed on Monday and we were successful with that amendment. That place should take a decision of this importance after careful discussion. If the Minister really believes that taking an amendment out of its grouping—no one expected it to come—and then putting it to a vote without any debate and without its even being moved is a proper way to discuss such an issue, I am disappointed.

I have been a Member of Parliament. My address was in the local telephone book for all the years for which I represented my constituency. As I mentioned in Grand Committee, when I had a majority of nine, at three o'clock in the morning pig farmers would ring up to say, "We was the nine", and give me a great deal of stick on what my views should be on the pig industry, so I understand the point about families.

The logic of the submission of the noble Lord, Lord Campbell-Savours, is that every representative in every devolved Assembly should be given the same protection. I have listened especially to the experience of those Members of your Lordships' House who know about Northern Ireland. Why should Members of the House of Commons be protected in a way that Members of the Northern Ireland Assembly are not? If the Government want to make some real changes, I suggest that they remove the provision from the Bill and look at the whole issue again, so that there can be proper consideration, rather than have it forced through as it has been so far.

We still have not heard from the Minister or anyone else any evidence from the police or the security forces that this is an essential requirement to protect candidates for the other place and their families. Yet, on a whim, some seem to want to remove the transparency that has been in place for some 137 years. This is an issue that should be debated, discussed and decided in the other place. Therefore, I beg leave to test the opinion of the House.

Division on Amendment 76

Contents 57; Not-Contents 129.

Amendment 76 disagreed.

Amendment 76A

Moved by Lord Tyler

76A: After Clause 21, insert the following new Clause—

"Description of candidates

(1) Schedule 1 to the 1983 Act (parliamentary elections rules) is amended as follows.

(2) In rule 6 (nomination of candidates), for sub-paragraph (3)(a) there is inserted—

"(a) where the candidate is not registered with a registered political party, a description of not more than 6 words in length, authorised by the Electoral Commission;

(aa) where the candidate is registered with a registered political party, the name of the party as registered under section 28 of the Political Parties, Elections and Referendums Act 2000; or".

(3) Omit rule 6A (nomination papers: name of registered political party)."

My Lords, I must first of all apologise on behalf of my noble friend Lord Steel of Aikwood. He was here earlier; unfortunately, the timing has coincided with a very important occasion to commemorate the foundation of the Anti-Apartheid Movement, of which he was a founder member. Not many people can still say that. He is very sorry not to be here to move the amendment on the Marshalled List in his name and mine.

This is a particular issue that has arisen recently, and I hope the Government are going to be able to give us some guidance on how to deal with it. The description of candidates on a ballot paper has, on two specific occasions recently, been used not to inform the electorate of the status of the candidate, but effectively to put propaganda on the ballot paper.

The first example was in Scotland, where certain candidates put "Alex Salmond for First Minister" on the ballot paper as their description—which was clearly completely outwith the intentions of the regulations, but was permitted. Similarly, and more recently, the BNP put on the ballot paper against candidates not a description of the party, but a slogan: "Protecting British Jobs". In both cases, there will, I think, be widespread recognition around the House that this is a deliberate distortion of the intention of the ballot paper, which is intended to be entirely factual—nothing to do with propaganda or slogans. My noble friend Lord Steel has, with the assistance of the authorities of the House, produced a way in which this problem can be dealt with; that is incorporated in Amendment 76A.

My noble friend Lord Steel left with me a number of cuttings, which I think at this point in the evening I shall forbear to use, because his reading matter ranges from the Sunday Timesto Private Eye. Members of your Lordships' House do not need to be told what either of those august journals think of the way in which the BNP, in particular, has used the electoral system to promote its policies.

However, there is a very serious point here, and it was addressed in the Gould report on the Scottish elections of 2007. It was quite clear in that election that there was real confusion in Scotland as a result of the way in which the ballot paper had, in my view and the view of my noble friend, been misused. It may be that the Minister this evening may not be able to accept the amendment in its present form, despite the assistance of the authorities of the House. But I hope the Minister will accept that there is a real problem here, and something needs to be done. I beg to move.

My Lords, I am very pleased that the Liberal Democrat Front Bench has now come around to the view that I have been promoting for some time, that slogans should be omitted from ballot papers. In the past, all the parties have been guilty of using the description in this way. In my view, it is quite wrong and I hope that ways will be found to stop it.

I have in front of me a copy of the ballot paper for the elections to the European Parliament in the north-west region, which has one or two interesting examples on it of exactly what we are complaining about—putting political slogans and other irrelevant information on ballot papers. The British National Party, as my noble friend has already said, says in its subsidiary description, "British National Party: Protecting British Jobs". That is clearly a slogan. The Christian Party says it is "proclaiming Christ's Lordship". That may or may not be a slogan, but it seems to me that if the Christian Party wishes to stand, then what it is about should be part of its campaigning and not on the ballot paper.

The Conservative Party and the Labour Party are crystal pure on this issue, and have nothing further, and the Liberal Democrats, for reasons I do not quite understand, say, "Liberal Democrats: liberal democrat". I do not think "Liberal Democrat" is a slogan, but why "Liberal Democrats" appears followed by "Liberal Democrat", I do not understand. Nevertheless, I think we are above reproach there.

Then we have the English Democrats Party, which says, "English Democrats: Putting England First". That is clearly a slogan. We have something called the Jury Team, which I do not understand at all, that says, "Democracy, Accountability, Transparency". That might be an ideological statement, but it is not something that should be on the ballot paper. The Socialist Labour Party says, "Leader—Arthur Scargill". People will have their views as to whether he should be on the ballot paper; it did not do them much good. The Green Party says, "Green Party: Say No To Racism". That is clearly a slogan, and while one does not doubt that the Green Party is anti-racist, it ought not to be on the ballot paper. So it seems to me that this is prevalent: people are using it to promote a political message. It is still going on and it ought to be stopped.

My Lords, I want to speak on this amendment, because I think it is an important issue. The reality is that we were in Committee prior to the last round of elections. It seems to me that this is an escalating level of abuse: if we allow it to develop in one particular area, then someone else will say, "Well, if they can do it, we can do it", and more and more candidates are going to adopt this approach in the future. We learn from this last election, which, as I said, took place after we were in Committee. I would have thought that the noble Lord, Lord Steel, as a former Presiding Officer in the Scottish Parliament, would have had particular experience of this, as I presume that candidates in Scotland have made representations to him that have led to him tabling this amendment.

Irrespective of what is in the Minister's brief, which may well have been written prior to these most recent elections and the experience of candidates in various parts of the country of being confronted with a ballot paper riddled with slogans—many areas had a very long ballot paper of some 15 to 18 inches long: the longest one I have ever seen in my life—I would have thought that my noble friend might want to indicate a little flexibility during the course of his response. At the least he might indicate that the Government are now considering these issues so that in the future we may consider further legislation in this area.

My Lords, briefly, I have some sympathy for what is behind this amendment. Like the noble Lord, Lord Campbell-Savours, I do not like the growth in the use of slogans on the ballot paper. As he said, since Committee we have seen them used a great deal in the European elections. The noble Lord, Lord Greaves, took us through the ballot paper for the north-west—the one on which I would have put my cross—and speculated whether the expression "liberal democrat" could be seen as a slogan. As someone who came from the old Liberal Party and often feels that there is not much liberalism left among the Liberal Democrats, perhaps he is right that it is a slogan—but then, looking at some of the other slogans, I imagine the poor berated Prime Minister might have rather resented the fact that the BNP took to paraphrasing his line "British jobs for British people" by adding its slogan "Protecting British jobs". It might have been preferable if we did not have such slogans on the ballot paper, and I will be interested to hear what the Government have to say in response to the noble Lord, Lord Tyler.

My Lords, the amendment seeks to prevent the use by political parties of descriptions on nomination and ballot papers at parliamentary elections, and provides that independent candidates may use descriptions of up to six words. The description would have to be authorised by the Electoral Commission.

The regulation of party descriptions has evolved considerably over the past decade. The Political Parties, Elections and Referendums Act 2000 provided for the compulsory registration of political parties. The Electoral Commission's 2003 report, Standing for Election in the United Kingdom, included the recommendation that parties should be given the option to register descriptions, and that candidates be limited to using their registered party name or a registered description on the ballot paper. The Electoral Administration Act 2006 introduced this measure for UK elections. However, independent candidates may use only the description "independent".

I recognise the concerns that have been expressed by politicians on all sides and by a number of electors who have questioned whether the descriptions used on the ballot paper at the recent European elections were appropriate, even if they were within the law. In addition, there has been a debate for some time about whether the existing arrangements are fair to independent candidates. However, I am concerned that the proposal set out in this amendment goes too far in the other direction.

Within the current framework, smaller or local parties have the opportunity to register a party name that capitalises on contentious local issues, and larger and national parties have argued that this puts them at a disadvantage. Party descriptions address this disadvantage by allowing national parties the opportunity to reflect local circumstances on a ballot paper. For example, parties commonly use one description when contesting UK parliamentary elections and another for elections to the devolved Administrations. The noble Lord's amendment would provide that independents would be the only candidates able to use a description of any kind. I question whether this arrangement goes too far in allowing independent candidates to make an appeal that would be denied to political parties.

In addition, while I recognise the noble Lord's intentions, I should make it clear that the amendment is defective since it envisages that candidates are registered with a political party. This registration is the route by which the amendment defines candidates who are compelled to use only the registered party name as a description. While political parties must register with the Electoral Commission, there is no requirement that candidates must register with political parties before they may stand on that party's behalf at an election; nor is there any requirement for any candidate to be a member of the party on whose behalf they are a candidate.

Another difficulty with the proposed measure is the burden that it would place on the Electoral Commission. In considering this issue in 2003, the commission concluded that it would be impractical for it to,

"attempt to regulate all independent candidates' descriptions in the tight timescales allowed by election timetables".

For this reason, I understand that the Electoral Commission does not support the noble Lord's amendment and is of the view that the existing position is satisfactory.

These matters are of course kept under review, and since this issue concerns the way in which those standing for election communicate with the electorate, it must be right that any change should be made in discussion with all those who have a stake in the electoral process. Therefore, I urge the noble Lord to withdraw his amendment.

My Lords, I am grateful to all those who have contributed to the debate, although I must say that I found the tone of the Minister's response much less forthcoming that I had hoped it would be as a result of the very effective way in which the noble Lord, Lord Campbell-Savours, in his normal emollient way, had invited the Minister to be equally emollient.

There is a serious issue here. I understand what the Minister says about the Electoral Commission's work, and it was clear from the Gould commission that what it recommended was not intended to be the last word on this subject; as I anticipated, there would be further discussion about the ballot paper design. I hope that I can read from what the Minister has just said that the continuing review to which he referred is ongoing: that it has not stopped and will not cease simply because there is a problem at the moment. I also understand that the Electoral Commission will review what happened in this respect in the recent European parliamentary elections. I hope that I have got that right. The Minister may like to intervene if I have got it wrong, but I hope the fact that he is not intervening suggests that that is exactly what will happen.

In those terms, having aired an important issue and the Government having responded, I beg leave to withdraw the amendment.

Amendment 76A withdrawn.

Clause 23 : Filling vacant European Parliament seats in Northern Ireland

Amendment 77

Moved by Lord Tunnicliffe

77: Clause 23, page 25, line 16, at end insert—

"(aa) where the previous MEP stood in the names of two or more registered parties when elected (or most recently elected), by a person jointly nominated by the nominating officers of those parties;"

My Lords, Clause 23 provides for regulations to be made that would permit a vacancy in a Northern Ireland European parliamentary seat to be filled by a person nominated by the nominating officer of the political party on whose behalf the vacating MEP stood when elected.

Currently, the law provides for by-elections to be held only in the event that a European parliamentary seat is vacated in Northern Ireland. Noble Lords will be aware that by-elections to fill vacancies are generally undesirable in elections where the single transferable vote form of proportional representation is used because this has the potential to distort the careful balance of seats that will have been secured by the election. Last year, the Government consulted publicly in Northern Ireland on possible changes to the current system, and there was substantial support for introducing the method set out in Clause 23 of replacing MEPs from political parties from both sides of the community.

Amendments 77 and 78 amend Clause 23 so that regulations may provide for an MEP who stood in the name of two or more political parties when elected to be replaced by a person nominated jointly by the nominating officers of those parties. The law generally provides for a candidate to stand on behalf of more than one political party at a European election, and noble Lords may be aware that just such a candidate was recently returned in Northern Ireland at the recent European election there.

In other areas of electoral law, where a nominating officer has a specific role we have sought to ensure that that role is undertaken jointly by nominating officers in cases in which a candidate stands on behalf of more than one party. For example, under the European parliamentary elections rules for Northern Ireland, a person may not be validly nominated to stand for election using more than one party's description unless the nominating officer of each party concerned authorises this. In line with this approach, I believe that when an MEP who stood on behalf of more than one party vacates his or her seat, the nominating officers of each of the parties on whose behalf the MEP stood should jointly nominate a replacement.

These amendments would provide valuable clarification of how the proposed new method for filling vacant European parliamentary seats in Northern Ireland would work for MEPs who have stood on behalf of more than one political party. It is for this reason that I ask noble Lords to support the amendments. I beg to move.

My Lords, I have one query on which the noble Lord can no doubt help me. What happens if the two nominating officers—presumably there will be one from each of the two parties—disagree on the replacement? They might have been in agreement at the previous election but then, as the noble Lord pointed out, lost the MEP two or three years later. The noble Lord does not think that there should be a by-election under STV, because that does not work on these occasions. That is another good reason for staying well clear of STV. So what do we do when two nominating officers who previously were on very good terms but no longer are, cannot agree on a successor?

My Lords, in Grand Committee I moved an amendment which in a sense was overtaken by the events that the Minister explained. The noble Lord, Lord Bach, very kindly offered me the advice of officials if I sought to bring the matter back on Report. I wish to put on record that the officials whose advice was proffered could not have been more assiduous in seeking to advise me. But I decided that it would have been invidious to identify specifically in legislation my concern, and therefore I did not take up the advice.

My Lords, if the nominating officers could not agree on a replacement and no replacement was nominated, the regulations would make provision for an election to be held.

My Lords, is the position that, on those occasions, there would have to be a by-election for just one Member, under a system that the Government have admitted would not be satisfactory?

My Lords, one has to be satisfied at some point that one has done the best that one can, and I believe that this is the best we can do. As one of the parties concerned is the Conservative Party, I cannot see any possibility of them not agreeing. I have nothing further to add.

Amendment 77 agreed.

Amendment 78

Moved by Lord Tunnicliffe

78: Clause 23, page 25, line 17, after "(a)" insert "or (aa)"

Amendment 78 agreed.

Clause 24 : Local returning officers for elections to the European Parliament

Amendment 79

Moved by Baroness Hamwee

79: Clause 24, page 25, line 34, leave out from beginning to "subsection" in line 35 and insert—

"( ) Section 6 of the European Parliamentary Elections Act 2002 (c. 24) (returning officers) is amended as follows.

( ) In subsection (2) (returning officer for electoral region in England etc), in paragraph (a), after "the Representation of the People Act 1983 (c. 2)" there is inserted "or is the proper officer of the Greater London Authority for the purposes of section 35(2C) of that Act."

( ) In"

My Lords, I shall speak also to Amendment 80. I appreciate that it may seem a little impertinent, or at any rate discourteous, to intervene for the first time in the debates on this Bill at this late stage. The subject of these amendments is a discrete matter and I declare an interest in that I was asked to put forward these amendments by the Greater London Authority. I was a member of the London Assembly, which was a part of the Greater London Authority, for eight years until just over a year ago. I am also a joint president of London Councils.

The GLA has been in discussion with officials about this matter, and I am extremely grateful for their assistance. Both what I have to say and the amendments will be very familiar to those officials. Amendment 79 allows the proper officer of the Greater London Authority—that is, the Greater London Returning Officer—to be appointed by the Secretary of State as regional returning officer at a European election in any region in England and Wales. In practice, it is likely that the GLRO would be appointed only as regional returning officer for London, but there could be circumstances in which the GLRO may be appointed to a neighbouring region or, if there are boundary changes—if anyone is brave enough to address that—to a region which includes London and an area outside London. The GLRO will not be appointed automatically as regional returning officer. It will be open to him or her, alongside acting returning officers for parliamentary elections, to put himself forward for designation as the regional returning officer by the Secretary of State.

Amendment 80 provides for the GLA to place the services of its employees at the disposal of the GLRO. If he is appointed as regional returning officer, this would apply only if the GLRO is appointed as regional returning officer for the London region. To speak off script for a moment, I should like to place on record my admiration for the work done by those who have been running GLA elections for some years now. I should explain that the funding that the GLRO would receive under Section 6(6) of the 2002 Act if he were appointed would be calculated on the same basis as that for regional returning officers in other regions and that for the RRO appointed for London at the June 2009 European elections. In other words, the GLRO will not be treated any different from other regional returning officers.

A couple of days ago I saw briefing from the Electoral Commission which I understand supports this amendment. The commission says that the experience that the GLRO gains in carrying out the role may mean that he or she is best placed to ensure the efficient running of the European parliamentary elections in the London region and that he or she should therefore be appointed in the way that the amendment provides. I beg to move.

My Lords, this amendment seeks to provide that the Greater London returning officer should be eligible for appointment as a regional returning officer for European parliamentary elections. The Government see merits in the proposed change and I am pleased that parliamentary counsel and Ministry of Justice officials have been able to assist the noble Baroness, Lady Hamwee, in the drafting of the amendment. The GLRO is the chief executive of the Greater London Authority. The GLRO leads an experienced elections team which has previously run successful GLA Assembly and London mayoral elections.

At European parliamentary elections, regional returning officers are appointed to each UK electoral region and they are responsible for the conduct of the election in their region. Under Section 6 of the European Parliamentary Elections Act 2002, in England and Wales the RRO is to be a person who is an acting returning officer for parliamentary elections and is designated as an RRO by an order of the Secretary of State. The GLRO is not able to be appointed as an RRO under these provisions as he is not an acting returning officer for parliamentary elections. These amendments change that position by amending the European Parliamentary Elections Act 2002 to allow the GLRO to be designated as an RRO. It also provides that if the GLRO is appointed as RRO for London, he may call on the assistance of employees of the GLA to help him carry out his duties as RRO in addition to the London boroughs in the London region.

There is no reason to doubt that the European elections in June 2009 were effectively administered in London under the existing statutory framework. However, the GLRO has experience of running London-wide elections and the proposed change would widen the scope of suitable persons who may be considered as the RRO for the London region in future European elections and make it easier to recruit for the post. The Government are therefore content to accept the amendment.

My Lords, I am extremely grateful for the acceptance of the amendments and the recognition of the experience, expertise, enthusiasm and dedication of those who have been running the elections.

Amendment 79 agreed.

Amendment 80

Moved by Baroness Hamwee

80: Clause 24, page 25, line 46, at end insert—

"( ) After subsection (8) there is inserted—

"(9) Where functions are conferred on the proper officer of the Greater London Authority under subsection (5) in relation to the London electoral region, the Authority must place the services of its employees at his disposal for the purpose of assisting him in the discharge of those functions.""

Amendment 80 agreed.

Consideration on Report adjourned until not before 8.30 pm.