“Designation of organisations: designation of one organisation only 8A (1) Section 108 of the 2000 Act (designation of organisations to whom assistance is available) has effect for the purposes of the referendum with the following modifications.
(2) Subsection (2) has effect for those purposes as if for the words from “the Commission” to the end there were substituted “the Commission may—
(a) in relation to each of those outcomes, designate one permitted participant as representing those campaigning for the outcome in question; or(b) if the condition in subsection (2A) is met as regards one of those outcomes (“outcome A”) but not the other (“outcome B”), designate one permitted participant as representing those campaigning for outcome B.(2A) The condition in this subsection is met as regards an outcome if either—
(a) no permitted participant makes an application to be designated under section 109 as representing those campaigning for that outcome; or(b) the Commission are not satisfied that there is any permitted participant who has made an application under that section who adequately represents those campaigning for that outcome.”(3) For the purposes of the referendum subsections (3) and (4) are to be treated as omitted.
8B Accordingly, for the purposes of the referendum, section 109 of the 2000 Act (applying to become a designated organisation) has effect as if—
(a) in subsection (4) paragraph (b) (and the “or” before it) were omitted, and(b) in subsection (5) paragraph (b) (and the “or” before it) were omitted.8C (1) This paragraph applies if the Electoral Commission designate only one permitted participant under section 108(2) of the 2000 Act in respect of the referendum.
(2) If this paragraph applies, section 110 of the 2000 Act (assistance available to designated organisations) has effect for the purposes of the referendum as if—
(a) in subsection (1) —(i) for “any designations” there were substituted “a designation”, and (ii) for “the designated organisations” there were substituted “the designated organisation”,(b) subsections (2) and (3) were omitted, and(c) for subsection (4) there were substituted the subsection set out in sub-paragraph (3) below. (3) That subsection is—
“(4) The designated organisation (or, as the case may be, persons authorised by the organisation) shall have the rights conferred by paragraphs 1 to 3 of Schedule 12.”
(4) If this paragraph applies, section 127(1) of the 2000 Act (referendum campaign broadcasts) has effect for the purposes of the referendum as if the words from “made” to the end were omitted.”
The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)
My Lords, in moving Amendment 1, I shall also give the Government’s view on Amendments 2 and 3, which stand in the name of my noble friend Lord Hamilton.
Government Amendment 1 would allow the Electoral Commission to designate a lead campaigner on just one side. This would override the current provisions in the Political Parties, Elections and Referendums Act 2000, which require the Electoral Commission to designate on both sides or on neither. This amendment has the same purpose as an amendment previously tabled by the noble Lord, Lord Hannay. The Electoral Commission has indicated that it supports the government amendment, but it does not support the amendments in the name of my noble friend Lord Hamilton.
For there to be full public confidence in the outcome of this referendum, it is vital that the rules in place for campaigning are fair, and are seen to be fair. The noble Lord, Lord Hannay, identified that the rules in the Political Parties, Elections and Referendums Act meant that a campaigner on one side could deliberately decline to apply for designation in order to deprive the other side of the benefits of this status. The desire of the noble Lord, Lord Hannay, to address this situation was met with widespread support in this House. I am therefore pleased to present Amendment 1 as a sign of the Government’s willingness to listen.
However, the amendment goes a little further than that proposed by the noble Lord, Lord Hannay. It does so because while the amendment of the noble Lord, Lord Hannay, sought to address deliberate “gaming” of the system, it introduced the possibility of a referendum campaign taking place in which only one side of the argument had access to a range of publicly funded benefits. Although perhaps unlikely, there could be circumstances where a campaigner, which is the only applicant for one side, applies in good faith but is not designated because it fails to satisfy the Electoral Commission that it is adequately representative. In that event, if single-sided designation is possible, a large range of publicly funded benefits could be available to just one side of the campaign when there had been no deliberate gaming tactics on the other side.
As a result, the Government have looked at whether each of the benefits of designation should apply in the event of only one side being designated as a lead campaigner. This requires a difficult balancing act, since if these benefits are pared back too much, that would merely reinstate an incentive to game the system—something that all noble Lords are seeking to avoid. The government amendment therefore establishes that in the event of only one lead campaigner being designated, it will not be entitled to a publicly funded grant or to make a referendum campaign broadcast. In terms of the referendum broadcast, I hope that noble Lords will appreciate that, as well as being a sensible balancing of the benefits available, it is also necessary to remove this right in the event of single-sided designation as it could undermine the capacity of broadcasters to act with due impartiality.
The grant available to the designated lead campaigners can be up to a maximum of £600,000 each and comes from public funds. It is a statutory maximum. The grant is administered by the Electoral Commission and can only be used subject to conditions that the commission sets. As an example, for the AV referendum in 2011, the grant available was a maximum of £380,000, but in the end, neither of the lead campaigners spent more than £150,000 of the available grant. The Government are clear that the perceived fairness of this referendum would be significantly undermined if the publicly funded grant is given to support one side of the campaign but not the other. Amendment 1 will therefore provide that, in the event of single-sided designation, this publicly funded grant will not be available to either side.
The Government have considered whether it would be appropriate to restrict any of the other benefits of designation where there is just one lead campaigner. However, we consider that further restrictions would simply reinject an incentive for campaigners to game the system as there would be limited advantages to being designated at all.
Amendments 2 and 3, tabled by my noble friend Lord Hamilton, would provide that the power to designate for just one outcome should be available only where there are no applications for designation from campaigners in support of the other outcome. I appreciate and understand my noble friend’s approach. Indeed, the Government had considered this very approach in preparing Amendment 1. However, we realised that Amendments 2 and 3 would undermine the intent of Amendment 1, which is to prevent gaming. Amendments 2 and 3 would merely alter the means by which a campaigner could seek to frustrate the designation process and prevent the other side gaining the benefits. Campaigners could do this simply by putting in an intentionally substandard application that would not meet the statutory test. My noble friend’s amendments would therefore enable campaigners to game the system, albeit in a different way. I know that that is certainly not what my noble friend seeks to do.
I will add one final reassurance to the House and to my noble friend Lord Hamilton. Amendment 1 does not affect the fundamental principle of the rules on designation. Where there is an application for designation that meets the statutory test, the Electoral Commission must designate a lead campaigner. Where there are two campaigners for one outcome that both meet the statutory test, the Electoral Commission must then designate the applicant that represents “to the greatest extent” those campaigning for that outcome. The Commission cannot refuse to designate where that test has been met. I beg to move.
Amendment 2 (to Amendment 1)
Lord Wallace of Saltaire (LD)
My Lords, I am sure that the noble Lord, Lord Forsyth, is too young to remember the 1975 referendum but while there was a decisive victory then, it did not stop those who lost the referendum from arguing within six months that it had been unfair and that the people had not really spoken, so they would continue their efforts. We have to recognise, sadly, that referendums do not solve matters for a generation and that the side which loses, even if it is defeated by a very large majority, is highly likely to say that it has been unfair.
Baroness Anelay of St Johns
My Lords, I am grateful to my noble friend Lord Hamilton for his analysis of how the government amendment has developed. It is not the amendment tabled by the noble Lord, Lord Hannay, who pointed out that he was reflecting very much on the view of the Constitution Committee of this House. Noble Lords throughout the House of course respect the Constitution Committee, and therefore gave their support at Report.
Both my noble friend Lord Hamilton and the noble Lord, Lord Hannay, have recognised the difficult balancing act that has to be achieved. This is indeed a complex matter. We have had to look carefully at how to craft the amendment so that we meet this House’s request that we discourage gaming the system, while avoiding penalising the person who is trying to avoid gaming and is actually the victim of it. We are also meeting the point made by the noble Lord, Lord Collins: that voices should be heard. My amendment has two aspects: broadcasting, and the maximum grant of £600,000. It is clearly up to the political parties to spend up to their limits, and others can of course spend up to £700,000. I will not rehearse in detail the whole panoply of what the spending limits comprise, but it was important to respond to the view of the Constitution Committee. We have sought to do that in a way which enables people clearly to see that it is better to take part, and take part honestly, than to try to game.
The Electoral Commission has indicated that, when looking at the designation of lead campaigners, it will expect campaigners to demonstrate the following: how the applicant’s objectives fit with the referendum outcome it supports, and the level and type of support for the application; how the applicant intends to engage with other campaigners; the applicant’s organisational capacity to represent those campaigning for the outcome; and the applicant’s capacity to deliver their campaign, including its financial probity. These are all matters we would expect the Electoral Commission to take into account.
I am sure that all noble Lords will join me in wanting this process to be firm and fair, so that the organisations representing views on either side can organise themselves such that they can present to the Electoral Commission a case which can be judged on its merits, and so the process can proceed with expedition. I urge my noble friend to do as he said and withdraw his Amendments 2 and 3 when they are called.
Baroness Anelay of St Johns
My Lords, I shall also speak to Amendments 9 to 25 inclusive, which are all in my name. Government Amendments 4 and 9 to 25 relate to the reporting requirements that apply to donations received by, and loans and certain other transactions involving, permitted participants other than non-minor registered parties.
One of the reasons why there are so many amendments in this group is that the Bill, like legislation for previous referendums, deals separately with donations and loans. Therefore, Amendment 4—along with Amendments 16, 17 and 18—is minor and technical. These amendments make it clear that different paragraphs in the schedules may be commenced at different times. Amendments 9 and 15 are also minor and technical, and would ensure that there is no conflict between two provisions in the Bill about the reporting of donations and loans that apply and modify the Political Parties, Elections and Referendums Act for different purposes.
I now turn to Amendments 10, 11, 12, 13, 19, 21, 22 and 23, which are the main focus of this group. The Government have tabled these amendments as a result of an undertaking I gave on Report to the noble Lord, Lord Jay. The noble Lord had tabled an amendment, following discussion with the Electoral Commission, to address concerns that the rules in the Political Parties, Elections and Referendums Act 2000 requiring campaigners to return donations from ineligible sources applied only to permitted participants. At the time, I set out clearly why the Government could not accept the noble Lord’s amendment as drafted, and I will not rehearse those arguments now, as they are on the record from Report stage in some detail.
However, I noted that the Government had already taken steps to address the concerns identified by the noble Lord’s amendment. These are provided by the introduction of pre-poll reporting requirements in relation to loans and donations. These provisions require permitted participants to be transparent about the sources of their funding before the vote takes place. In these pre-poll reports, campaigners are also required to detail certain donations received and loans entered into before they become a permitted participant. I gave an undertaking on Report to consider whether the level of transparency provided as part of the pre-poll reports was adequate. On that basis, the noble Lord, Lord Jay, withdrew his amendment at that stage. The government amendments I have brought forward today represent the result of consideration and discussions with the noble Lord. We believe they will provide for greater transparency, but without imposing an unnecessary burden on campaigners.
Government Amendments 10, 11, 13, 19, 21 and 23 establish that the first pre-poll reporting period for donations and loans will begin on commencement of the relevant provisions and end after the first week of the referendum period. I note that the Electoral Commission supports all the amendments in this sub-group. The actual length of the referendum period is as yet uncertain, as noble Lords are aware, simply because we do not know the date of the referendum itself, but noble Lords will recall that we agreed earlier to an amendment stating that the referendum period should be at least 10 weeks. Setting the first period through this amendment enables the starting of the first pre-poll reporting period without waiting for the regulations setting the subsequent reporting periods to be made.
Government Amendments 12 and 22 make further progress by increasing the scope of donations and loans that need to be reported. The Electoral Commission supports these amendments too. Under the Bill as it stands, the pre-poll reports need to include only donations or loans for the purpose of meeting referendum expenses that are to be incurred during the referendum period. This would be difficult to apply in practice, especially if the referendum period has not yet been set—as it cannot be, because the negotiations have not yet concluded and we are not yet able to bring to the House a statutory instrument inviting the House to consider a date for the referendum.
These amendments will require the reporting of donations and loans that were for the purpose of meeting referendum expenses generally. This approach means that, once these provisions are commenced, if campaigners are receiving funding from foreign sources to help meet any referendum expenses, they will have to declare this before the referendum. The campaigning rules that will apply to the EU referendum do not expect people to anticipate that they may seek at some future stage to become registered as a permitted participant and return money they receive. This is clearly the fair approach to regulation.
However, the pre-poll reporting rules recognise that there is a risk that, in certain circumstances, a campaigner might delay registering as a permitted participant so that they can receive otherwise ineligible funding. The pre-poll reports therefore seek to shine the light of transparency on the sources of funding campaigners seek to use. Through government Amendments 12 and 22, we have therefore increased the scope of the pre-poll loan and donation reporting requirements. I hope the House will recognise that the additional transparency the amendments provide is indeed a benefit, and that the Government have delivered on the commitment I gave at Report. I am very grateful indeed to the noble Lord, Lord Jay, for his constructive amendment at Report and his engagement on this point. It has helped us to arrive at this outcome.
I now turn briefly to government Amendments 14, 20, 24 and 25, which are all minor and technical. Amendments 14, 20 and 24 will correct a cross-reference, insert an additional definition and set out more clearly how existing reporting requirements under PPERA will function when applied to this referendum. Finally, Amendment 25 clarifies that the pre-poll loan reports must cover third-party security arrangements, referred to in the Bill as connected transactions, as well as loans and other regulated transactions to which the committed participant is a party. I beg to move.
Baroness Ludford
My Lords, I rise with some hesitation, because this is not an area that I know much about. I find the briefing from the Electoral Commission slightly confusing. It is probably a bit unfair to ask the Minister whether I should be confused, but is she satisfied that the concerns expressed by the Electoral Commission have been fully addressed? Its briefing states that it supports the amendments, which will increase transparency of information, but it is not clear from the last two paragraphs of the briefing whether those concerns applied before Report and have now been cleared up by the new amendments today. The last sentence states that,
“in addition to these amendments we will use our guidance for referendum campaigners to strongly encourage them to only accept donations from permissible sources prior to registering with us”.
Is it the Minister’s understanding that that has been overtaken by events and that her amendments now fully satisfy the concern that some donations would escape the permissibility requirements and post-poll reporting obligations? Do her amendments close all those loopholes? I apologise for asking her to clear up my confusion, but I would none the less be grateful.
Lord Flight (Con)
My Lords, how will these measures deal with contributions from overseas? This might not be a big issue, but obviously there is the thought that there may be significant contributions from the EU itself.
Baroness Anelay of St Johns
My Lords, I am particularly grateful for the intervention of the noble Lord, Lord Kerr of Kinlochard, because it encapsulated the issue. The noble Lord, Lord Jay, is content that we have gone as far as a government amendment, or indeed any amendment, can go—I think that is the point—within the statutory system. The Electoral Commission in its briefing, to which the noble Baroness, Lady Ludford, referred, is saying that, beyond legislation, there is the whole issue of people behaving properly. Clearly, we want to ensure that those people who are receiving donations carry out their best efforts to ensure that they come from a source from which they should receive them. But also there are those issues that I mentioned in opening, such as the fact that some people who are receiving donations will not know at that stage that later on they will want to register to be a permitted participant. Therefore, we have to be cautious not to overload them with regulation, because they cannot guess what they are going to do as the sums of money rise and how they will feel as their activity increases. The noble Lord, Lord Kerr of Kinlochard, encapsulated that position very well.
My noble friend Lord Flight asked about overseas moneys. I referred during my presentation of the amendment to how that might be affected. I made it very clear in earlier stages of this Bill how money from overseas may be part and parcel of permitted donations. I do not think that it would be appropriate for me at Third Reading to go through the detail of that again, but perhaps it would be right for me to respond to my noble friend by making it clear that we have always set out that permitted participants cannot accept donations of more than £500 from the EU institutions, as these are not eligible donors under PPERA. With companies based in Europe, as long as a campaigner does not spend any other money campaigning during the referendum period, it would be possible for campaigners to receive up to £10,000 from a foreign company and use it to campaign. That is a necessary function of proportionate controls on low-spending campaigners. I went into this in some detail in Committee, so I shall not try to do so now. It is important that we have transparency in all these matters, and that is exactly what we have tried to put at the heart of this group of amendments.
“( ) In this paragraph references to “common plan expenses” of an individual or body are to referendum expenses which are incurred by or on behalf of that individual or body—
(a) as mentioned in sub-paragraph (1)(a), and(b) in pursuance of a plan or other arrangement mentioned in sub-paragraph (1)(b).”
Baroness Anelay of St Johns
My Lords, in moving Amendment 5, I shall speak also to Amendments 6 to 8, which are in my name. These are technical amendments relating to the “acting in concert” rules that will apply for campaigners at the referendum.
The acting in concert rules apply when two or more campaigners work to a common plan, incurring expenses during the referendum period to promote a particular outcome at the referendum. These rules are intended to prevent a campaigner setting up multiple bodies to campaign for the same referendum outcome, thereby circumventing the spending limits. When a designated lead organisation is involved, all spending incurred as part of that plan counts against the lead campaigner’s spending limit only. None of the spending counts against the spending limits of the other campaigners in the common plan. When two or more campaigners work together as part of a common plan without the involvement of a designated lead organisation, the Bill ensures that the total spending incurred as part of that common plan counts against each of the campaigner’s spending limits.
Government Amendments 5 to 8 are minor drafting changes to make clear the original policy intent that campaigners do not have to account for expenditure by other participants in the common plan which have been incurred independently of the arrangement. I conclude these groups of amendments with technical matters, but they, as all others, have shown the complexity of trying to deliver legislation that should be as fair and balanced as possible.
Before I proceed to other matters in this group, as we come to a close I ought to take this opportunity to give a short expression of thanks. I made clear at Second Reading that the Government’s aim is to deliver a robust and fair referendum on the UK’s membership of the European Union. Noble Lords across the House have helped to achieve this aim with their usual careful attention and contributions. I am grateful to all noble Lords who spoke during the passage of the Bill, and to those who took the time to attend various meetings across summer and autumn outside the Chamber.
It is always a dangerous business to pick out individuals, but I am going to be dangerous. I hope noble Lords will permit me to name a few names. I am particularly grateful to the noble Lords, Lord Hannay and Lord Kerr of Kinlochard, who brought their great expertise to bear, as did others, such as the noble Lord, Lord Wigley, who in particular made it possible to focus on matters that affect the devolved Administrations.
The Opposition Front Benches have been unfailingly constructive, and I am very grateful to the noble Baronesses, Lady Morgan of Ely and Lady Smith of Newnham, and their colleagues for their work and engagement and for testing us from time to time. Of course, I should like to pay particular tribute to my noble friends Lord Forsyth, Lord Blencathra and Lord Hamilton, among others, who have certainly kept me on my toes in the best possible spirit—I wish I wore heels as it would be easier to be on my toes.
From a personal perspective, I am very grateful to my noble friend Lord Faulks. His support throughout this Bill has been invaluable to me. I am particularly grateful for his sensitive handling of the important debates in this House about the referendum franchise which, of course, will be continued in another place. I am also grateful for the counsel of my ministerial colleagues, David Lidington, the Minister for Europe, and John Penrose, the Minister for Constitutional Reform.
It has always been of the utmost importance to the Government that the referendum process should be fair and be seen to be fair. I am confident that the European Union Referendum Bill is all the stronger for the detailed scrutiny it has received in this House. The Bill will now return to another place, which will express its view. As noble Lords will be aware, the other place has consistently voted against lowering the voting age, and I expect it to repeat that decision with regard to this Bill. As I said at Second Reading, this Bill sets the stage for one of the most important decisions that the people of these islands have been asked to make in a generation. Our work gives them the opportunity to do that. I beg to move.