European Union Referendum Bill

Debate between Lord Forsyth of Drumlean and Lord Hamilton of Epsom

Wednesday 18th November 2015 Lords Chamber

[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 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.

European Union Referendum Bill

Debate between Lord Forsyth of Drumlean and Lord Hamilton of Epsom

Monday 2nd November 2015 Lords Chamber

[Lord Wallace of Saltaire]

My Lords, I, too, agree with this amendment. I anticipate that when the negotiations are complete, the Prime Minister will publish a paper and I think it highly likely that the noble Lord, Lord Forsyth, will disagree fundamentally with what the Prime Minister says.

[Lord Hamilton of Epsom]

My Lords, I went to the Public Bill Office and said that I wanted to put down an amendment very similar to this. It would have called for a White Paper, which this amendment does not. When it was pointed out to me that my noble friend Lord Forsyth’s amendment was already tabled, I added my name to it. This smacks very much of Amendment 1, which I put my name to and which was supported very early on by the noble Lord, Lord Kerr. The Liberal Democrats supported it, too, and I suspect that the Front Bench of the Labour Party is going to support it. This amendment ties in with everything that the Government have said already. The only worry I have is that my noble friend the Minister may say that the Government have given an undertaking to this and that it does not need to be in the Bill. I have to say that we will all be very reassured if it is.

[Lord Forsyth of Drumlean]

Before my noble friend sits down, one of the key points is of course the provision:

“Not less than four months before the date of the referendum”.

[Lord Hamilton of Epsom]

Yes, indeed, that is a very significant part of it.