European Union Referendum Bill

Lord Forsyth of Drumlean Excerpts

Wednesday 18th November 2015 Lords Chamber

Moved by

[Lord Forsyth of Drumlean]

12: Schedule 1, page 17, line 1, leave out sub-paragraph (2) and insert—
“(2) Paragraph 1 of that Schedule (limits in relation to referendums held throughout United Kingdom) has effect for the purposes of the referendum as if for sub-paragraphs (2) to (5) there were substituted—
“(2) The Electoral Commission shall by order set a limit on the total permitted referendum expenses for those campaigning to remain a member of the European Union, and for those campaigning to leave the European Union.(3) The limit set under sub-paragraph (2) shall be the same for both campaigns.(4) For each campaign, the limit set under sub-paragraph (2) shall apply to the sum of—(a) expenditure by the designated organisation for that campaign, and(b) expenditure by any registered party in support of that campaign.(5) An order under sub-paragraph (2) may specify, within the overall limit, a sub-limit for the designated organisation for a campaign, and sub-limits for specified registered parties supporting that campaign.(6) An order under sub-paragraph (2) must be made by statutory instrument, which must not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.””

[Lord Forsyth of Drumlean (Con)]

My Lords, I raised this issue in Committee, but in the debate it was made pretty clear that my previous effort did not work because it had the effect of preventing political parties from spending any money at all. I do not want to repeat the arguments that we had in Committee, but what this is about is tackling the basic unfairness which the Bill creates for spending limits between the two camps—the leave and the stay camps. As the Bill is currently drafted, it will mean in practice that those who wish to campaign to stay in the European Union will have more than twice the funds to spend of those who wish to campaign to leave. Perhaps I am a bit naive, but I thought that the whole point of having expenditure limits was to ensure fairness so that no party, whichever side it is on, is able to outspend the other unfairly. Yet what the Bill does is to enshrine in legislation as an absolute fact the ability of the stay campaign to spend more than twice what the leave campaign can spend.

This arises because, although the Bill provides for equal expenditure for the two designated campaigns, the political parties are able to spend money at similar levels according to the share of the vote that they got at the last general election. I just do not understand why the amount that the political parties can spend on the referendum campaign should be related to the votes they got at the last general election. In the case of the Conservative Party, many of the people who voted Conservative will have wanted to leave the European Union. To be fair to the Conservative Party, it has decided that it will be neutral during the course of the campaign.

I suppose it could be argued that the Labour and Liberal Democrat parties have no money because they have been bankrupted by their efforts in the election campaign and therefore that this is not something to be too concerned about. But that does not stop people giving money to those parties in order to support the campaign that wishes to stay in the European Union. This seems to go to the heart of what these limits are about. My first question for the Minister is: if we cannot devise a way in which the limits ensure that both campaigns are treated fairly and are able to spend the same amount, what is the point of having the limits at all? Further, why should these limits be related to the vote at the last general election?

I noted that the Electoral Commission sent out a missive to us all suggesting that it could not support this amendment. I had a word on the telephone with the nice lady who sent out the press release and asked her to explain why the Electoral Commission was not concerned about the issue of fairness. She said that it was a matter for the political parties and not something that the commission could concern itself with. I asked her to send me a brief indicating what the position of the commission is on these issues, but I have to say that it has not come in time to discuss the amendment—which I suppose could be because the commission is short of resources. It does actually cost as much as half the cost of the Royal Family; it is a very expensive quango indeed, and I would have thought that it would have been able to find the resource to think of a way to ensure that there is fairness in the funding of these campaigns. Rather naively, I thought that the reason we are spending £25 million or £26 million of taxpayers’ money every year on the Electoral Commission is so that it can ensure that elections and referenda are fair. But apparently the commission cannot think of anything and it is not its job to do that, it is up to the Government.

At an earlier stage my noble friend said that it was quite difficult to make this work. I did not draft the legislation and I did not suggest the limits. I cannot for the life of me understand why we should have limits which have the perverse effect of creating a great unfairness. Earlier in our consideration of amendments today, my noble friend Lord Faulks made a really important point. He said that it was very important at the end of the day that everyone accepted the result of the referendum and that no one could cry unfairness. I do not know how, if it turns out that one side is able to spend two and a half times or 2.3 times as much as the other, it will be possible for the Government to avoid the accusation of unfairness.

Some people say, “Actually, how much you spend does not have much of an influence”—in which case, why have spending limits? The perverse effect of this legislation, as it stands, is that it will limit the amount that those of us who wish to leave the European Union can spend, simply because the political parties have taken a particular view. In the case of my own party, where the leadership has a particular view that seems to be towards staying in the European Union, the vast majority of the members would take the opposite view. It could be argued—I do not want to tread into the dangerous territory of suggesting that there is some kind of operation going on here—that the decision to make the Conservative Party neutral was to avoid the embarrassment of finding that the money which it could spend, some £7 million, might have gone to the leave campaign.

I know that my amendment may not be perfect. I know that the Electoral Commission cannot possibly take on this role because it does not have the resources even to explain why it cannot take on the role, or how it could ensure fairness if it did take it on. I think that my noble friend needs to think about this from the point of view of ensuring that we have a fair campaign and that we do not have all kinds of abuses happening. We can see, for example, that people might be tempted to fund the political parties that wish to stay as a way of getting round the limitations that are put on expenditure that would otherwise be available to the campaigns.

I apologise for raising the issue again, but I have produced a different amendment which approaches it in a different way. I am not as clever as my noble friend and I certainly do not have the resources of the Electoral Commission, so I cannot believe that between them they could not devise a way to ensure that we have a limit on expenditure that is fair to all parties. I beg to move.

[Lord Hamilton of Epsom (Con)]

I very much support my noble friend Lord Forsyth in his amendment. He mentions that, because we have this completely disparate allocation of funds, we may have a rather ridiculous situation. Let us suppose that a Conservative donor wants to donate towards staying in. He cannot donate to the Tory party because it is neutral and is not allocating funds in either direction, so he may end up giving funds to the rather bankrupt Liberal Democrats as a way of getting his funds into supporting the staying-in campaign.

The real problem with all this is that the results of the last election are completely immaterial. Why should somebody who is Labour vote to stay in? I can tell noble Lords that hosts of Labour supporters will vote to come out. Even some members of UKIP will vote to stay in. This will break in every direction. The Liberal Democrats are these fanatical pro-Europeans. Their supporters, who I know well down in the West Country, are not fanatical pro-Europeans. Many of them were extremely tempted to vote for UKIP in the last election. The reasons are: they are chapel, anti-establishment and do not terribly like the major parties either way round. The Liberal Democrats know that well but they have a leadership in the country that is completely unrepresentative of their members and voters all around.

This is the problem: all parties will break in different directions, so what on earth are we doing basing the financing of an in or an out campaign on the results of the last election? It is completely irrelevant because everybody will vote in different directions. They will be influenced by a lot of different factors. It is inconceivable how we could have dreamed up this extraordinary funding system, which allocates a lot more money to the “stay in” campaign than it does to those who want to pull out. We know the figures: £7 million for each— £7 million for the Labour Party because it seems to be pretending that all its members want to stay in. Then the Liberal Democrats get £3 million; the CBI and the SNP will allocate their funds for staying in. That comes to more than £11 million. What have we got on the other side? We have £7 million for the allocated body, then we have £4 million for UKIP, which makes £11 million, so you have £11 million against £18 million. This is supposed to be a fair, level playing field but the financing of it is completely skewed. Everyone will say that money was used to completely skew the result.

[Lord Forsyth of Drumlean]

It is £11 million to £18 million only because the Conservative Party is remaining neutral.

[Lord Hamilton of Epsom]

My noble friend is absolutely right. If the Conservative Party had decided to support the “staying in” campaign it would have been £25 million to £11 million, which is extraordinarily disproportionate in the circumstances.

I do not know what the thinking is behind this. I cannot understand where everybody is coming from. This is a referendum on whether we stay in the EU or whether we leave. It is nothing to do with how we all voted in the last election. How can the whole basis of financing be based on that? It is quite beyond me.

--- Later in debate ---

[Lord Collins of Highbury (Lab)]

I am going to repeat some of the arguments I made in Committee because I think that this amendment is basically doing the same thing.

There is an assumption behind the contributions we have heard so far that we are dealing with a pot of money. We are not. We are dealing with a spending limit. We are not dealing with an allocation of funds that should be distributed fairly. Perhaps we could do that. I have not heard many noble Lords opposite support state funding of political parties, but that is the only way to guarantee fairness.

I am really surprised by the noble Lord, Lord Willoughby de Broke. Let us say the leave campaign got all the money in, spent the upper limit and then it was discovered that UKIP spent more than the limit. UKIP would then have to give all its money back. That is the reality. You are trying to set a limit when you do not even know who is going to be participating in the campaign.

First, it is not a pot of money to be spent. Secondly, this referendum is not going to be fought by just two sides. Political parties, civil society, trade unions, churches and other groups that have an opinion will not keep their mouths shut simply because the Conservative Party is unsure of what position it will take as a whole. Perhaps the noble Lord, Lord Lawson, is correct that this whole thing about registration and the Conservative Party not registering is more to do with the state of the Conservative Party than the rights and wrongs of how the referendum campaign should be conducted.

[Lord Forsyth of Drumlean]

I do not know whether the noble Lord has had a chance to read my amendment, which is completely different from that which he made a speech about in Committee. But I am following his argument so would I be right in deducing that he would be quite happy to have no limits at all?

[Lord Collins of Highbury]

No, I would not because the Electoral Commission is trying to address quite a complex situation. A referendum is not a usual situation. Political activity in this country is predominantly, although not wholly, through political parties, and PPERA sets out all kinds of constraints and limitations on donations. It has created an environment of transparency, and spending limits.

My view is that spending limits are not particularly effective in establishing a level playing field, particularly when they are set so high and no one can ever reach them. That is why we have quite big imbalances in general elections. That is why the Conservative Party regularly outspends the Labour Party: it has at least 300 people who can give more than £50,000 a year to the party, which I suspect is why the party has in the past supported a cap of £50,000 on donations. Personally, I think the smaller the cap the fairer it becomes. You would then have to look at how to replace that money and what mechanisms to use to ensure that there is an allocation of public funds on a fair basis—hence, I suspect, why the Electoral Commission is using that methodology.

The fact is that spending limits are not the whole picture. What the Electoral Commission is trying to say to us is that the “remain” and “leave” campaigns are not the only participants. We are not going to silence everyone else in this referendum. We are not going to say to civil society, “You have no right to speak”, and we are certainly not going to say to UKIP, “By the way, you will have no right to spend money in this campaign unless it is through the official ‘leave’ campaign”. I do not think that it would tolerate that or accept it—I would not—but that would be the effect of the noble Lord’s amendment. We cannot be certain of what other people will be spending and we do not know the number of participants.

The rules should not be used to reduce the number of participants. That would be unfair and not democratic. I do not want to bang on too much about this, as I have given sufficient reasons why we will not be supporting this amendment, but it is clear that the amount of money available will not be determined by rules set out in the Bill. It will be determined by people donating and raising money. I do not think that even the Conservative Party, if it said that it would register, could put its hands on £20 million that easily. I certainly know that the Labour Party cannot put its hands on £9 million that easily. We have to understand that these are mechanisms to ensure transparency and accountability but they will not necessarily deliver fairness because the campaign is not designed that way.

--- Later in debate ---

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

My Lords, my noble friend’s Amendment 12 would introduce an overall cap on referendum spending by political parties and the designated lead organisations that will campaign for each outcome: either leave or remain. As my noble friend explained, it arises from his concern that the rules as they stand create great unfairness and that the remain side will be able to spend more than the leave side.

Amendment 12 would unpick one of the fundamental principles in the Political Parties, Elections and Referendums Act 2000, which provides a framework for this as for other referendums since its passage. My noble friend Lord Forsyth asked why we have limits and why are they linked to the results of the general election. My noble friend Lord Hamilton asked how we arrived at the provisions. We arrived at them after an exhaustive and exhausting parliamentary method of having draft legislation scrutinised carefully by Members of both Houses. After draft legislation, a Bill was drawn up that reflected the submissions that had been made. In particular, the Fifth Report of the Committee on Standards in Public Life, chaired by the noble Lord, Lord Neill of Bladen, provided recommendations that led to PPERA being passed. These provisions have been in place for 15 years. I was in the House 15 years ago. I did not take part in discussions on the Bill—at the time I was on the Front Bench carrying another brief—but I recall that much careful attention was paid to the Bill.

Having said that, I appreciate that there are concerns about unfairness. In this particular case, the concern appears to be that particular parties may support particular sides of the referendum. That is as may be. The report produced by the Committee on Standards in Public Life considered an overall cap for all campaigners on each side of the argument. The noble Lord, Lord Neill, concluded:

“The administrative apparatus required would resemble one of Heath Robinson’s most outlandish contraptions—and would almost certainly not work”.

Those are his words, not mine. As well as being administratively impractical, the report further noted that such a cap,

“would, or at least might, impose an unwarranted restriction on freedom of speech”.

I appreciate that my noble friend has tried to avoid some of the pitfalls of his earlier amendment in devising this one by focusing purely on certain categories of potential campaigners—the political parties and the designated organisations. However, as others, including the noble Lord, Lord Collins of Highbury, said, if one is a Conservative and finds that one’s national party is taking a neutral position, there are still places where one can put one’s money if one wants to bet on the outcome of the referendum. Political parties will not be the only campaigners at the referendum—far from it.

Although I know that my noble friend has tried to take great care to narrow down his amendment and focus it more, it still will not deliver what he might intend. The amendment provides that the Electoral Commission must set an overall spending limit and can then apportion this between the political parties and lead campaigners on each side. We believe that the spending limits are a matter for Parliament. They were decided by Parliament in legislation, on the basis that changes would also be made by legislation. The spending limits which apply to the EU referendum are therefore in the Act and, as I said, have been in operation for 15 years.

There is no guarantee that each of the campaigners within the umbrella cap will be able to raise the funds necessary to hit the spending limits. One or two noble Lords have referred to that, perhaps with some feeling of regret. We will have to see what happens. Perhaps to avoid the risk of restricting freedom of speech, the amendment does not deal with the other committed participants, each of whom will be able to spend up to £700,000. So the referendum will not only feature campaigning by political parties and the lead campaigners; there will be interest, and lots of voices, on both sides. But I would say that it is highly unlikely that exactly the same number of committed participants will register on each side of the argument. One can imagine that it would take an imbalance of only 10 campaigners on one side or the other to create a £7 million difference in overall potential spending.

These are the kind of vagaries with which this House and another place had to struggle when the initial Bill was considered and became an Act. Indeed, I note that when the draft Bill was published, the spending limits for political parties were the same—but it was then challenged during the course of the scrutiny of the Bill, particularly by the Committee on Standards in Public Life, which questioned whether it was right that political parties were subject to the same limits regardless of their respective number of MPs. So the sliding scale that we see now in PPERA was introduced in response to consultation on the Bill back in 2000. Therefore, we are not seeking to amend that basic framework.

These matters have been of concern before and I recognise my noble friend’s concerns, but they were considered carefully when the legislation was under consideration here, both in draft form and on the Floor of the House. Certainly, it is the case that the approach taken in this Bill by applying PPERA is that those who seek to spend modest amounts—that is, no more than £10,000, which I know some people reading this debate in Hansard may consider is by no means modest, but in the context of elections it is—can decide not to register and so be subject only to a relatively light-touch regulatory regime. Meanwhile, to prevent wealthy campaigners having an undue influence, there are individual spending caps for those who register.

What we see in the Bill is a well-established approach which is practicable and enforceable and, most importantly, encourages participation. So although I understand my noble friend’s concerns, I hope that, with that explanation, he will feel able to withdraw his amendment.

[Lord Forsyth of Drumlean]

Oh dear. I have to say to my noble friend that, although I understand the practical difficulties, she has not addressed the point. The reason why we have spending limits is to create fairness. People will be able to provide funding through political parties and other organisations. Some may say that people could set up 10 organisations to compensate for a political party’s spending, but a political party will have an organisation on the ground. It is not about the quantity of money; it is also about how it is spent, the organisation and the machine behind it.

Throughout the conduct of this Bill, my noble friend has been extremely patient and helpful and I pay tribute to the way in which she has handled the Bill, but this just will not do, because the Government’s declared policy is that there should be seen to be a level playing field.

[Baroness Anelay of St Johns]

My Lords, I am not trying to address the overall point of fairness. In each and every referendum, the perception of what is fair will vary according to the position taken by the groups, as my noble friend has pointed out in his amendment, and according to the nature of the event. I am saying that these matters were considered carefully by this House and another place in drafting the legislation used for referendums. It is only on that basis that I am explaining that there is statutory provision for how we address the matter of donations. I am not seeking to put the world to rights in this case, in the way that I know my noble friend would like to put it to rights, as he sees it. I am saying that there is a statutory basis on which this system has to rely.

[Lord Forsyth of Drumlean]

But my noble friend is the Government. It is not necessary to rely on the provisions in the PPERA legislation. It would be perfectly possible to put in place arrangements with regard to expenditure that ensured fairness. Once this legislation is in place, if it remains as it is, throughout the whole campaign I certainly will be arguing that it has been rigged in a way that gives an advantage to people who wish to stay in the European Union. I can understand why the Labour Party may feel at the moment that it may not be able to get lots of funding from people, but there will be people who will see this as an opportunity to provide more resource for what they believe to be an appropriate decision for the country. If we end up with limits that have the perverse effect of giving one side more funds than the other, it will be a source of grievance throughout the campaign—and if we end up with a close result, as has already been pointed out, people will argue that the result was bought and that it was unfair.

I understand the difficulties from the Government’s point of view, but to argue that legislation that was passed in 2000, which was thinking of referenda where, by their very nature, political parties would be divided, as opposed to this European issue where the first referendum was about sorting out the problems in a divided Labour Party—

[Lord Collins of Highbury]

Now it is your turn.

[Lord Forsyth of Drumlean]

I do not think the noble Lord is in a very good position to talk about divided political parties at the moment. If I were him, I would keep my head down on that subject.

It is very disappointing that my noble friend is not able to respond, and I hope that she may give further thought to this and that the vastly expensive Electoral Commission with its vast resources may be able to be a little more constructive than saying that it is all a political problem for which it has no responsibility. I will reluctantly withdraw the amendment because I do not think that if I divided the House at present it would be much appreciated by my noble friends or anyone else, but the response is very unsatisfactory and I think it will be a source of grievance unless it is addressed before this Bill reaches the statute book. I beg leave to withdraw the amendment.

Amendment 12 withdrawn.

--- Later in debate ---

[Lord Hamilton of Epsom]

I am afraid that the noble Lord, Lord Pearson, has slightly confused things, because he was intervening on the intervention of the noble Lord, Lord Liddle, on me. Therefore this adds to the confusion. However, I do not think we will revert to talking about the free press and the fact that different newspapers have different views on things—I am not sure how productive that is. What we were talking about—or what I was talking about—was purdah and the fact that there is a concern, which I hope the Minister will address, that there will be some last-minute intervention, if the polls indicate that the country wants to pull out, to try to swing the vote with some bit of propaganda from the EU. Clearly, business has to continue to be done with the EU, but at the same time we do not want to see the whole referendum slewed by a last-minute intervention where the EU is being inordinately generous with other people’s money and doing something to try to swing the vote. That is what my Amendment 18 is about. I beg to move.

[Lord Forsyth of Drumlean]

My Lords, I certainly support my noble friend, but I will speak to Amendment 21 in this group, which is in my name. We have had a lot of discussion, and my noble friend Lord Hamilton has emphasised the importance of having rules on purdah. I have to say to the noble Lord, Lord Liddle, that he needs to distinguish the difference between public and private money. The Daily Mail and other newspapers are not spending taxpayers’ money, while the EU is. My noble friend is concerned that money that is provided by the taxpayer should not be used for a political purpose. That is a very important principle. I know that he is so enthusiastic about the European Union that he sometimes finds it difficult to see the distinction, but that is what we are talking about, and that is why we have these rules on purdah.

It was with some dismay and utter disbelief that I discovered that if people break these rules on purdah—the Scottish Government, the British Government or some other public agency—there is no sanction or penalty for doing so. It is true that people can seek judicial review at vast expense and then get a judgment after the event. I think it very unlikely that any court would say, “You’ve got to rerun the referendum because a public body spent money which was prohibited by purdah”. Therefore, with this amendment I am seeking to create some kind of sanction.

In Committee, I suggested that we bring back the old thing that applied in local government. Very spectacularly, Dame Shirley Porter ended up getting a bill for £20 million for having transgressed in terms of her abilities to operate under statute. I understand that that system of surcharging councillors has now disappeared. In Committee, I suggested a system of surcharging but it was dismissed on the grounds that it was inappropriate. My friends in the Electoral Commission said that it would be wrong to hold individuals to account. I do not really understand that. I think that if people are responsible for spending public money in a way that is ultra vires, they should be held responsible for it. If no one is responsible then no one is going to make sure that the rules are obeyed.

Having found that that suggestion did not find favour with my noble friend the Minister, I have had another go. This amendment suggests that we create a system where a fine is imposed on whoever is responsible and that it should be not less than the amount of taxpayers’ money which they have had cause to spend in breach of the purdah rules. This may not be the ideal solution, but in Committee my noble friend was kind enough to indicate that she recognised that there was a problem and she said that she would think about what could be done by way of a sanction. I am hopeful that she might consider Amendment 21 to be the answer to this problem but, if it is not, that she herself will have an answer. If there is no effective sanction, it rather begs the question: what is the point of having the rules on purdah if they can be breached?

I anticipate that somewhere in her file my noble friend will have a note saying that it would be very embarrassing for any public institution to breach the purdah rules and that it would be disadvantageous to it in the campaign. All I can say is that, having experienced the Scottish referendum campaign, I would not put much trust or hope in that limiting the kind of misuse of public funds which my noble friend Lord Hamilton has talked about.

[Lord Hamilton of Epsom]

Does my noble friend agree that, if it comes to the difference between winning a referendum and losing it, a bit of embarrassment can be lived with?

[Lord Forsyth of Drumlean]

I am sure that, like me, my noble friend would want always to strictly obey the law and the rules and that he would not be tempted to stray from the true path by the prospect of winning or losing. However, I am rather concerned that that might not be true of Governments. Individuals are not held responsible for the actions of Governments, which is why I am proposing this amendment.

[Lord Pearson of Rannoch]

My Lords, if I am free to talk to the amendment of the noble Lord, Lord Forsyth, there is perhaps a way in which we can penalise the European Commission if it cheats in this matter, as I assure your Lordships it will. We could withhold from our contribution to the corrupt coffers of Brussels an amount which would make the Commission think again before it behaved in a manner in which it certainly will. In the background, we have the gross figure that we pay to Brussels every year. According to the 2014 Pink Book, which has just come out, the figure was £19.994 billion, of which Brussels was graciously pleased to give us back £7.66 billion. That leaves £12.329 billion, which we pay net into the coffers of Brussels every year for it to waste on matters which do nothing in our national interest. I suggest to the Minister that the Government think about this. I ventilated this idea in Committee and repeat it now: if it behaves in the way that it certainly will, and if it knows that it is going to suffer a financial penalty, perhaps that will make it not worth its while doing so.

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[Baroness Anelay of St Johns]

My Lords, the Government would not be happy with any such move and the European Commission is clearly aware of that. We are not the Irish Government and this is a referendum on a different matter.

I understand and recognise the legitimate concerns about these matters and that is exactly why the Government are putting so much effort into trying to address them. It is not a matter of taking our eye off the ball: we will continue working on these issues.

My noble friend Lord Hamilton has tabled two amendments, Amendments 18 and 19, to Clause 6. The clause provides a power for the Minister to make regulations modifying Section 125 for the purposes of the EU referendum. However, I repeat the assurance that I made in Committee that the Government have no plans to use the regulation-making power under Clause 6. I tried to make that as clear as I could. I appreciate though that my noble friend seeks to limit the power so that Ministers can make regulations only where they have reasonable grounds to consider that regulations are necessary to secure the continuing function of the Government or the safety of the public or a section of the public.

This follows on from our discussion in Committee when noble Lords were trying to get me to posit the future—to look into a crystal ball and say, “This is what may happen”. The very nature of why Clause 6 was inserted in another place was because this would be something that people could not foretell. Not one voice in the other place was raised against Clause 6 going into the Bill. We ought to bear that in mind because, having given the undertaking that we have no plans, we cannot foresee the future. We have to have a care for the safety and security of this country and it would be unfortunate for this House to consider constraining the ability of the Government properly to be able to respond.

The reason, I suspect, why not a voice was raised in another place is that safeguards requested by the other place were put into the use of this power before the amendments were brought forward. These state that regulations would need to be made at least four months ahead of the poll following consultation with the Electoral Commission—and of course that would be subject to the affirmative resolution procedure in both Houses.

As I say, although there are no plans to use the power, there may be exceptional circumstances which would require the Government to lay regulations before Parliament on this issue. No doubt we would all be rather surprised if that were to happen, because, as I say, we have no plans to do so at the moment. However, a responsible Government should be able to keep the power available.

My noble friend also tabled an amendment to remove Clause 6(8) because he is worried that it might ensure that the Government cannot disapply the restrictions in Section 125 under the power in Clause 4. What I hope to be able to do is give my noble friend a reassurance that his concerns are misplaced in this respect. I can assure him that Clause 4(1)(c) as currently drafted simply would not allow the Government to disapply in regulations the restrictions in Section 125 for the EU referendum; we could not do it. Like Clause 6, it could be used to modify aspects of Section 125, although we do not have plans to do so. But we consider that Clause 6(8) is necessary for a rather technical reason. It ensures that the power to amend Section 125 in Clause 6 does not in any way call into question the general regulation-making power in Clause 4 to make modifications to PPERA for the purpose of the EU referendum. The general regulation-making power is essential for aspects of the published conduct rules; it is not about the purdah enshrined in Section 125, about which I know and understand why some noble Lords have concerns. In this case, it could be used if we identify other issues with the PPERA provisions. I can give my noble friend an assurance that, like Clause 6, the power in Clause 4 can be used only following consultation with the Electoral Commission and will of course be subject to the affirmative resolution procedure.

Finally, I come to the amendment tabled by my noble friend Lord Forsyth, proposing a penalty for a breach of Section 125. Interesting questions have been raised about the whole issue of how one holds people to account. My noble friend is seeking to impose a monetary penalty on a person who breaches the restrictions in Section 125. The Electoral Commission has no role in the enforcement of Section 125, and has said in its response that it is not clear how this significant change to its role and powers would work in practice. That is the issue; it is not what the commission was set up to do and it would change its role.

We believe that the current arrangements are appropriate and that they work. Those within the scope of Section 125 will be legally obliged to comply with it. Like other legal obligations on public authorities across the statute book, it can be enforced through judicial review. That is the purpose of judicial review: to ensure that public authorities comply with the law. I know that my noble friend has concerns that this may be a paper tiger, but he has been an admirable Secretary of State in difficult times. He will know how difficult it is for a Government to face judicial review; he will know about the inconvenience and the cost. I would expect that others would be mindful of that as well. Judicial review is something that this Government seek to avoid having to incur, and I am sure that other public bodies take the same approach.

[Lord Forsyth of Drumlean]

The point is that judicial review is closing the stable door after the horse has bolted.

[Baroness Anelay of St Johns]

My Lords, with due respect, given the legal system of this country—in which I should declare an interest because my husband is a barrister—I would say that if a prosecution were to be brought in a civil case, or indeed in a criminal case, I doubt whether it would be resolved before the referendum had taken place. However, my noble friend has raised a justifiable concern about how we deal with these punitive matters. If we had the luxury of a separate piece of legislation to look at how all these matters are to be resolved, consideration could be given in relation to that. However, I think that that is a long way off at the moment. Of course, as a politician at the Dispatch Box, “long” to me can be a matter of just a few weeks because they can seem like a long time, too—particularly if I have breathing down my ear on my right-hand side a Chief Whip who has had an overfull session already, so I shall not try to offer extra legislation. I want to get out alive.

--- Later in debate ---

[Lord Jay of Ewelme (CB)]

My Lords, Amendment 14 is a technical and—as I reassured the noble Lord, Lord Hamilton, in advance—neutral amendment, but nevertheless an important one. Its effect would be to clarify that funds from an impermissible source, whenever received, should not be spent on referendum campaigning.

The amendment is supported—indeed, encouraged —by the Electoral Commission, which has identified a clarification that is needed in the provisions designed to stop donations from foreign sources being spent on the referendum. My amendment is designed to address this.

As background, the Electoral Commission has come to the view that the controls in the Bill, which flow from the usual PPERA regime and which prevent campaigners accepting donations from foreign sources, come into effect only at the point the campaigner registers with the commission to be a permitted participant in the referendum. In practice, this means that there may be no control on the sources of funding a campaigner receives before it registers with the Electoral Commission, even if those funds are then used for campaigning during the referendum.

My amendment is designed to make clear that a campaigner cannot use any money for its referendum campaign from a source that would otherwise be impermissible under the PPERA regime. That, of course, includes donations from foreign sources. Without this clarification it would be possible for a campaign organisation to receive significant donations from foreign sources before it registered as a permitted participant. That money could then be spent in its entirety on campaigning during the referendum period. As I said, the amendment is designed to remove that risk.

This is a technical, neutral but important amendment that will help reduce the risk of accusations after the referendum that one side or the other has behaved improperly. I beg to move.

[Lord Forsyth of Drumlean]

My Lords, this seems a very sensible amendment. I was going to try to save time by asking the noble Lord before he sat down whether “foreign sources” includes the European Commission and the European Union. I will give way to the noble Lord so that he can intervene and tell me the answer.

[Lord Jay of Ewelme]

It may do—the Minister will be able to answer that question when she comes to sum up the debate.

[Lord Forsyth of Drumlean]

Because it seems to me that if it did not include the European Union and the European Commission, it would make something of a nonsense of the argument that he put forward. Perhaps my noble friend could indicate what the position is.

[Lord Collins of Highbury]

I have one brief question relating to Gibraltar. Political parties currently are not permitted to accept donations from Gibraltar, but when the Bill becomes enforceable they will be if it is for the purposes of the referendum. I want to understand how the amendment will impact in particular on the changes relating to Gibraltar.