European Union Referendum Bill

Baroness Anelay of St Johns Excerpts

Wednesday 4th November 2015 Lords Chamber

Moved by

[Baroness Anelay of St Johns]

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

[The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)]

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

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

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

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

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

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

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

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

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

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[Lord Tyler (LD)]

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

[Baroness Anelay of St Johns]

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

[Lord Collins of Highbury (Lab)]

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

[Baroness Anelay of St Johns]

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

[Lord Wallace of Saltaire (LD)]

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

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[Lord Collins of Highbury]

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

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

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

[Baroness Anelay of St Johns]

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

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

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

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

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

[Lord Hannay of Chiswick]

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

[Baroness Anelay of St Johns]

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

“a tactical decision not to apply for designation”.

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

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[Lord Forsyth of Drumlean]

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

[Baroness Anelay of St Johns]

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

[Lord Collins of Highbury]

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

[Baroness Anelay of St Johns]

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

[Lord Forsyth of Drumlean]

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

[Baroness Anelay of St Johns]

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

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

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

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

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

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

[Lord Davies of Stamford]

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

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[Baroness Anelay of St Johns]

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

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

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

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[Lord Hannay of Chiswick]

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

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

[Baroness Anelay of St Johns]

May I intervene?

[Lord Hannay of Chiswick]

Yes, please.

[Baroness Anelay of St Johns]

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

[Lord Hannay of Chiswick]

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

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

[Baroness Anelay of St Johns]

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

[Lord Collins of Highbury]

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

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Moved by

[Baroness Anelay of St Johns]

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

[Baroness Anelay of St Johns]

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

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

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

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

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

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

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

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

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

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

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[Lord Collins of Highbury]

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

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

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

[Baroness Anelay of St Johns]

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

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

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

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

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

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

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

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

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

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

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

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[Lord Forsyth of Drumlean]

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

[Baroness Anelay of St Johns]

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

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

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

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

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

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

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

[Lord Forsyth of Drumlean]

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

[Baroness Anelay of St Johns]

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

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

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

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

[Lord Forsyth of Drumlean]

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

[Baroness Anelay of St Johns]

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

Amendment 35 agreed.

Moved by

[Baroness Anelay of St Johns]

36: Schedule 1, page 13, line 25, at end insert—
“14A Schedule 13 to the 2000 Act (expenses that are referendum expenses where incurred for referendum purposes) has effect for the purposes of the referendum as if in paragraph 2(a) after “public funds” there were inserted “or Gibraltar public funds”.”

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Moved by

[Baroness Anelay of St Johns]

41: Schedule 1, page 18, line 2, at end insert—
“( ) In relation to a donation in the form of a bequest sub-paragraph (3)(a) is to be read as referring to an individual who was, at any time within the period of 5 years ending with the date of the individual’s death, a Gibraltar elector.”

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Moved by

[Baroness Anelay of St Johns]

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