Mr Redwood’s speech during the committee stage of the European Union Referendum Bill, 16 June 2015

John Redwood (Wokingham) (Con) : I hope that, when the Government bring the Bill back on Report, they will give further consideration to the question of campaign spending limits. We are all freshly back from an energetic general election campaign, and one of the finest things about the United Kingdom’s traditions that ensure fair and free elections is the fact that we have pretty strict expenditure limits in each constituency. Those of us who were the incumbents fighting to retain our seats were rightly subject to rules stating that we could not use our incumbency in any way, as that would have provided us with an obvious advantage. We could not use our ability to raise more money, for example, because there were strict limits in place.

Those strict limits applied for a five-month period. We had the long campaign period, which was subject to expenditure control, followed by the short campaign period. It is the short campaign period for the referendum that we are talking about today. I believe that it was right to impose the campaign limits early, because political parties are increasingly campaigning well in advance of the general election proper, and it looks as though the referendum campaign will kick in well before the referendum proper. Indeed, there are clearly already stirrings, even before this Bill has passed through the House of Commons.

It is good that we all have to face the challenge from a number of candidates, any one of whom has a reasonable chance of raising the maximum that we are allowed to spend in a given constituency. It is quite a large sum for an individual to raise, but it is quite a modest sum for someone who has a reasonable amount of support or who asks for small or medium-sized donations from a range of people. It is not that difficult for a relatively popular party or candidate to raise the money needed in order to spend right up to the constituency limit, to give them the maximum chance in the challenge.

I understand that the sums will be rather bigger in a national referendum campaign, and that if one side is a lot more popular than the other, that would give it an advantage not only in the vote but in the amount of fundraising it could do. But I do think that, under the current Bill, the very large sums that would be available, because of the way the parties and some of the supporting organisations are thinking, are thoroughly disproportionate. That would give the impression of unfairness, and the British people have a great sense of fairness. Many people on the yes side have a sense of fairness and would prefer it if the referendum campaign were conducted with more equal sums of money, so that the weight and quality of the argument matter more than access to funds and special ways of messaging.

My second point is to support those who are talking about the duration of the campaign. The campaign proper could well be limited to four weeks. An awful lot can be said in four weeks. Those with little interest in politics will get rather bored if the referendum campaign dominates the news and media for more than four weeks. Given the natural interest of quite a lot of people in this subject, and the enthusiasm of many of those who wish to campaign on either side, there will, in reality, be a longer period. There should be a long and a short period, as there is in a general election, so that there is proper control of the messages and the money spent in the longer time period, although it would be up to either side, or both, to take the view that they really do want to concentrate their spend and their message in the last four weeks because they might be afraid of overdoing it. I suspect though that they will want a longer period, so we will need some kind of regulation on the longer time period—the full duration of the campaign proper.

My third point is to support those who have raised serious issues about the expenditure of public money, particularly about the expenditure of European Union money. It would be wrong for the European Union to spend any money intervening in a British referendum over whether the United Kingdom stays in the European Union. It is, after all, United Kingdom taxpayers’ money. On current polling, we know that there is a split of opinion, with very substantial bodies of opinion on both sides. People would be very reluctant to see their tax revenue taken by the European Union and then spent on putting out messages and propaganda on just one side of a very contentious referendum.

Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): I must remind the right hon. Gentleman of what happened in the Scottish referendum. The only difference was the way that it was funded. In the United Kingdom, funds are collected centrally and go to London. If the European Union had the same model, they would be collected centrally and go to Brussels and then given out again. The point is that it is taxpayers’ money. In Scotland, we saw our taxpayers’ money come back to the UK Government and used against one side of the referendum campaign.

John Redwood: I quite understand, but I am suggesting something different. I am suggesting that to have a completely fair and independent referendum, there should be much stricter controls over the expenditure of Government money.

Mr MacNeil: I am very grateful to the right hon. Gentleman for his revelatory tone and words. He said that he wants a stricter and fairer system, so his commentary on the Scottish referendum is instructive and very welcome.

John Redwood: The result in Scotland was pretty conclusive, so the expenditure of Government money was not the crucial thing that made the difference to the result. The result speaks for itself. But we can always learn from past experiences. For my choice, I do not favour the expenditure of public money on interfering in elections and referendums. I am known to be careful with public money anyway, and I would not want the money to be spent on this area. It is for individuals to decide what they wish to do by way of political intervention, and they can make their own decisions. If we let them have more of their own money to spend, they may wish to spend it on interventions in elections. That is how I would rather it was done. In this case, it would be particularly counterproductive for the European Union to spend some of our money, which we send to them, on intervening on one side. It would cause enormous resentments. Indeed, the no campaign might even welcome it as it would be a cause in itself which it would make use of if this became a clear use or abuse of public money.

Kate Hoey (Vauxhall) (Lab): I raised the issue of the EU on Second Reading. I had a helpful letter back from the Minister for Europe this week. Will the right hon. Gentleman comment on his final paragraph? He says:

“I would trust the proper diplomatic relationships with Governments and institutions, and encourage them to stick by their duty to respect the right of the British people to take their own decision responsibly.”

I do not feel that I can trust the EU on this very important issue. Does the right hon. Gentleman feel that?

John Redwood: I am afraid that I do share some of the hon. Lady’s worries. I would like to see that clearly stated in writing and as an act of policy from the EU itself. That would probably be much appreciated in many sections of the United Kingdom, so that we can be sure that there would not be clumsy, unwarranted or unwelcome interference. It would be a double irony if the EU were using our money to do it. That is what makes it particularly difficult. UK taxpayers of both views would be paying the money to the EU, but only one side of the argument would be funded by that money.

Mr Christopher Chope (Christchurch) (Con): Surely the Government could do something on this front. They could ask the European Commission and the European Union not to intervene and not to fund the referendum campaign. They could then get a written undertaking from the Commission not to use European Union funds. That is outside the scope of the Bill, but the Minister could give such an undertaking.

John Redwood: Indeed. I am speaking to amendment 10 tabled by my hon. Friend the Member for Stone (Sir William Cash), who seeks to clarify this point and prevent the use or abuse of EU money. I hope that the Minister will respond and that he will have his own proposals on Report. The Electoral Commission has given exceedingly good advice across the board on this referendum. It seemed to suggest that it would not be right for the EU to give money for the campaign, and it would be nice to have a reassurance that the Government share that view and accept the advice of that august body, which is there to guide us.

There is an additional issue with EU money, to which some colleagues have referred. What do we do about the EU money that is routed to bodies or organisations within the UK that choose to make a donation to a referendum campaign? That is another difficulty. As I understand it, such a donation would be perfectly legal because the organisation giving the money would be able to say that it had other sources of money and it was not a direct gift of EU money to the referendum campaign. Such a body may be swayed by the fact that it had had generous access to EU moneys in the past. While one would hope that none of them were donating for that reason, people would suspect that a body in receipt of substantial EU moneys in the normal course of business that saw fit to give money to the campaign to stay in would hope that the EU would be better disposed to it when it put in its next application for money.

Sir William Cash (Stone) (Con): I do not know whether my right hon. Friend was here when we were debating part of this, but the Electoral Commission’s position is that a central principle of the regulatory regime that it supervises is that foreign sources of funding should not have undue influence on our democratic process. It has come to the conclusion that the European Commission does not fall within the list of bodies that can register as a campaigner. Does my right hon. Friend agree that we have to get to the bottom of that? It is highly arguable that the European constitutional arrangements are effectively embedded in our own constitutional arrangements by virtue of sections 2 and 3 of the European Communities Act 1972. We need to get this right.

John Redwood: I was present to hear my hon. Friend speak to his amendment, and I am aware of the legal minefield that the provision could represent. That is why I worded my remarks cautiously—I said that I thought it was the view of the Electoral Commission that it would not be appropriate for the EU to spend money on the campaign. As he reminds us, it has made a clear statement about being a principal donor to the campaign, but there are other ways in which it could help, and it might argue that it was a domestic institution for these purposes. It might say that the EU’s writ runs within the UK. There is an office of the EU in London; it might try and route it through the London office. We need to say that that would be unwise. The Minister may think that it is illegal or that it should be impeded in some way. We need clear guidance from the Minister.

I return to the issue of indirect funding of the campaign by grant-in-aid to organisations that are helped or partially funded by the EU. Of course, it is a matter for the referendum campaign to argue over the rights and wrongs of EU funding. I am sure the no campaign will want to say that the money we send to Brussels and which it gives back to our organisations could be given to them directly by the United Kingdom Government if Brussels were not in the way. It could be pointed out that the £11 billion we send to Brussels in tax revenue is spent outside the UK, so, were we to leave, that money would be available for either tax cuts or extra spending in the United Kingdom.

That would be a matter of debate in the referendum, but an issue for the Bill relates to the legality, morality and political wisdom and judgment regarding the point at which an organisation becomes so dependent on EU funding that it has a very strong interest in it. Restrictions or limitations—or at least a declaration of interest—might need to be made if such a body decides to become involved in the referendum campaign. It would be wise to let people know of such a clear financial interest if the body played an important part in the yes campaign.

Sir William Cash: Does my right hon. Friend think it would be possible to have a register of interests? Then, when companies go on the BBC and say, “We don’t want the United Kingdom to leave the EU,” we would know where their money comes from, what their actual policy is and the extent to which they are dominated by the EU system.

John Redwood: A register of interests would be one way of handling it. It would be quite complicated for large companies, but rather easier for grant-receiving organisations. The issue for companies is rather different. I am all in favour of business people taking an active part in our politics, but they may need to intervene as individuals, because if they are an executive in a very large company that has a broad shareholder base, they may not be speaking for their shareholders on a very political issue. People would ask them, “Is this your private view or are you speaking for the company and has it been tested in a company general meeting?” That is probably a debate for another day. I am all in favour of major business involvement, but unless someone owns the company they have to be careful in associating the company with their own particular views.

The conclusion I wish to put to the Government is that this Bill is extremely welcome, but it is work in progress. These are very complicated areas, because the EU is a unique and powerful institution. In order to have a fair assessment by the British people of its worth or demerits, we need to be very careful and to not in any way trammel our usual belief in independence and fairness when we test the mood of the people. I do not think the Bill quite yet meets that requirement, but I hope that, on Report, Ministers will have better and more detailed answers about how we handle the scale of campaign donations and the period prior to the referendum campaign proper with respect to controls over messages and financing, and that they will be able to address the very vexed subject of how much power, influence, money and messaging the EU itself can inject into what should be a United Kingdom debate.

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  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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