Political Parties and Elections Bill

My Lords, perhaps I should make clear the rationale of the grouping of this amendment with others. Amendment 38 deals with the possibility of an effective cap on donations in general. Amendment 39, also in my name and that of my noble friend Lord Rennard, deals with contributions from trade union funds. Then there are two extremely important amendments in the name of my noble friend Lord Goodhart—he enjoys the support of Members on all sides of the House—for tax relief on small donations. The rationale for the grouping is simply to make sure that we are able to shift responsibility for funding our politics from a small number of big donors—millionaires—and try to encourage many small contributions, with tax relief, for those who make modest donations. I know from our debate in Grand Committee that there is widespread anxiety to make this shift. The amendment precisely follows the recommendations of the Hayden Phillips discussions and agreement, to which I shall come back in a moment, but it is absolutely fundamental to all the proposals that have been endorsed by all parties and those from no party to try to take big money out of British politics. Wealthy individuals, organisations and companies should not be able to buy influence in the way that they have in recent years. The inequality of influence generated by massive donations runs entirely counter to the democratic principle and erodes public trust. All of us in your Lordships’ House and, indeed, Members of the other place must be very well aware of the decline in public trust in recent years. Since I come from something of an ecclesiastical family, I am accustomed to producing or listening to a text. Therefore, I have a few texts to use this afternoon to show the widespread support for the approach represented by these amendments. In the first place, I know that there is widespread support for a reduction in the amount of expenditure by the parties. For example, Mr Gordon Brown asked Mr David Cameron at Prime Minister’s Questions in December 2007 whether he would, ""support a national and local limit on expenditure".—[Official Report, Commons, 5/12/07; col. 816.]" We will come back to that point. At a policy forum in west London on 2 December 2007 Mr Brown said that, ""the latest problems in party funding show why it is right not to delay, and it is now time to act … we have learned just how easily trust in our politics can be eroded … we must now complete the work of change"." Then the right honourable Francis Maude, speaking on behalf of the Conservatives in the other place, said in an opposition-day debate instigated by the Conservative Party on 4 December 2007: ""We have consistently argued for comprehensive reform that would deal finally with the perception that large donors have undue influence on political parties … Dealing with that perception requires, above all, a cap on donations".—[Official Report, Commons, 4/12/07; col. 704.]" Everyone now agrees that a cap of £50,000 would accomplish that. Finally, now that the noble Lord, Lord Bates, is in his place, I should say that he was in very good company, not only in his party but in other parties, when he said in the debate on Monday in your Lordships’ House: ""We on this side of the House look forward to the day when big money is genuinely taken out of politics".—[Official Report, 15/6/09; col. 913.]" The noble Lord, with his voice and his vote this afternoon, can start that process. The day he looks forward to could indeed be today. It is extremely important that we build on the work of the Hayden Phillips discussions. All parties took a very active role over a long period under his distinguished chairmanship. It was quite clear from his work, which he set out in great detail in his publication of the draft proposals, that he very strongly supported views that had been previously expressed by the Constitutional Affairs Select Committee in the other place in 2006. However, in Grand Committee I am sad to say that the Minister did not seem to be totally persuaded either by the Hayden Phillips discussions or by the Constitutional Affairs Select Committee because, the Minister said, he felt that a cap on donations would so clearly result in a loss of income for the larger parties—I hope that I am paraphrasing reasonably well—that the issue of state funding had to be reopened. That is not the case. First and foremost, there is excessive expenditure by some of the big parties at election time. I do not absolve even the Liberal Democrats of that; occasionally when they have had money they have used it. However, the noble Viscount, Lord Tenby, who has extensive experience of the advertising industry—I am delighted to see him in his place—pointed out to the Grand Committee that there is huge wastage, particularly on advertising, by the political parties. It does not follow that by restricting large donations to the political parties they would somehow be so inhibited from effective campaigning that they could not do their proper job. It is also why we emphasise the need to link these restrictions on the big donors with the very important initiative taken by my noble friend Lord Goodhart and others on other Benches to try to encourage smaller donations with tax relief. I emphasise that the experience in other countries—notably, what Barack Obama did in the United States—should encourage this approach in Britain. Barack Obama demonstrated that it was possible to raise very considerable sums of money in the height of the recession in the United States from individuals by way of the encouragement that was given in his campaign. Those who contributed then felt that they had a real connection with his campaign and a sense of ownership. It was not just a few individuals paying the bills; it was spread throughout the states. As a result, more than $750 million was raised. A record-breaking $150 million was raised in September at a time when the country was in recession. That is a very important example. I remind the House of the specific recommendations of the Hayden Phillips team, which were the result of a cross-party agreement. They were: ""A1 There shall be a cap on donations and loans to all political parties that reach the threshold specified at A2.""A2 The cap shall apply to all parties registered in Great Britain with two or more elected representatives to Parliament, the Scottish Parliament, the National Assembly for Wales and the European Parliament. It shall apply to the party, its accounting units, and regulated donees.""A3 The final level of the cap will be £50,000"." That was the specific proposal that the parties agreed to. I do not propose to go through all of the rationale that has been advanced for this restriction because it is well documented. I do not know of any serious argument against it. The Phillips team also relied on the work of the Constitutional Affairs Committee in the other place. I briefly refer to its recommendation on page 55, paragraph 152, of its 2006 report: ""The UK currently limits expenditure but does not limit donations, while in the U.S.A, donations are capped but spending is not. Both systems lead to significant problems. In Canada, both income and expenditure are comprehensively capped and regulated, and we were convinced by the strengths and benefits of this model"." Even in the past few days there has been very strong support among the public, demonstrated in public opinion polls, for restrictions on the huge sums of money that are donated to the political parties and, indeed, on the way in which they spend them. In the Phillips proposals the following paragraph is very significant: ""Few would now dissent from the proposition that there should be a limit on how much any one donor may contribute to a party each year. Of the parties consulted by my Review, just one – UKIP – does not favour this approach"." Everyone else supports this proposal. I hope that that will be evident from the speeches from other Benches this afternoon. I come now to the final point in the Phillips recommendations. The summary firmly said this: ""I believe there is an emerging consensus that: the status quo, in which there are no caps on donations, is unsustainable and therefore donations to parties should be limited; and restrictions on donations should be buttressed by measures to prevent breaches of the new regulations"." I agree wholeheartedly with that. I hope your Lordships’ House will as well. I turn briefly to Amendment 39, which concerns the treatment of contributions from trade union political funds. Here again, there was very considerable consensus and agreement in the Hayden Phillips talks. I draw attention to the first part of our amendment, which sets out very clearly the intention of our special treatment of the trade unions. It says: ""The limit on donations established by"," the section referring to the £50,000 cap on donations, ""shall apply to all expenditure out of trade union political funds unless—" I repeat: unless— ""all the conditions of this section have been fulfilled with regard to the expenditure in question"." There follow very careful safeguards to ensure that the democratic will of members of trade unions is fulfilled but that, in those terms, the trade union has every right effectively to act as a collecting agent for a political party, or indeed for several political parties. The proposals that the Hayden Phillips team looked at—again, I emphasise the cross-party agreement—were very carefully thought through so that they would not penalise a trade union for taking a sensible active role in British politics but would ensure that everything was as transparent and democratic as it could be. Again, I draw attention in the amendment to the final point made by the Hayden Phillips team: ""Due to the increased transparency and choice for trade union members the ten-year review ballot on the existence of the political fund is no longer necessary and should be removed"." In other words, the quid pro quo, if I may put it like that, was that trade unions, by being more transparent and more careful in relation to their own members, and by giving them more transparency and democratic rights, would not have to suffer as much bureaucracy as they do at the moment. I hope that with that fairly brief canter around this issue—because it has been discussed at considerable length in the other place, in the Hayden Phillips discussions and in Grand Committee—noble Lords will recognise that there is a quid pro quo in this group. By restricting the millionaires and the very big donors to political parties but, under the terms of my noble friend’s amendments, with a tax concession for small donations, we have a deliberate switch from the big boys to the general public, and that must be in the best interests of British democracy. I beg to move.