The government suffered a second defeat over the lobbying bill in the House of Lords yesterday after peers voted to amend constituency spending rules.

The Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill, which had its third reading in the Lords yesterday, places limits on political activity by third parties in the run up to an election, and charities have said it may harm their ability to campaign.

One of the sector’s concerns was a rule limiting spending on campaigning in any one constituency to just under £10,000. Charities have complained that these rules would be difficult to follow, and the Electoral Commission, the body responsible for ensuring compliance with the rules, has said they would be difficult to enforce.

Crossbench peer Lord Harries of Pentregarth proposed an amendment which says only election material directly addressed to electors and unsolicited telephone calls intended to discover voting intentions should be considered “controlled expenditure” under the bill.

The amendment was passed by 248 votes to 222.

The amendment is the second defeat for the government in the Lords. Peers had voted at the report stage for an amendment which removes most staff costs from the scope of the bill.

That amendment was also proposed by Harries, who chairs the Commission on Civil Society and Democratic Engagement, set up by charities and campaign groups to campaign for changes in the bill.

During the debate on his amendment last night, Harries said constituency limits as originally proposed were described by the Electoral Commission as “unworkable and unenforceable,” that campaigning groups would find it very difficult to divide up expenditure on constituency lines, and that many campaigns crossed constituency boundaries.

The bill returns to the Commons today, where the government may seek to overturn the Lords amendments.