Political Parties and Elections Bill

My Lords, it is not the role of the Government to advise political parties on how to broaden their sources of income. Indeed, if the Government and my party had any particularly bright ideas, we would be keeping them to ourselves for as long as we could. If we set the level of relief as low as my noble friend suggests, the administrative burden involved could all but cancel out the benefit of the relief. There is a further concern with my noble friend’s suggestion. Once the principle of relief is established in legislation, there would be little to stop future Governments increasing the sums involved, perhaps exponentially. It would be poor legislative practice to allow for such a possibility. Noble Lords might argue that state funding of politics already exists in the form of Short money, Cranborne money, policy development grants and free postage at elections; so the principle is already well established. However, that money is provided with a specific purpose or political activity in mind. By contrast, tax relief on donations would amount to a broad subsidy on a political party’s general activity. The amendments do not propose any restriction on the purpose for which the relief income could be used. There is a risk that under the amendments a political party would receive income which could be spent for non-political purposes. This danger was acknowledged by the noble Lord, Lord Goodhart, when we first considered these matters in Grand Committee. The amendment before us does nothing to allay these fears, however. As has been noted, inheritance tax relief is currently provided on bequests to political parties. Noble Lords have argued that this suggests that the principle should be extended to income tax. I can only repeat what I said in Grand Committee. We are not in favour of extending this anomaly any further. If carried and enacted, these amendments could effectively place political parties on an equal footing with charities. The Government do not agree that the two should be regarded as analogous. Charities can and do undertake campaigning activities, but only in the context of supporting the delivery of their charitable purpose. Guidance for charities is quite clear on the matter. In order to be a charity, an organisation must be established only for charitable purposes that are for the public benefit. An organisation will not be charitable if its purposes are political. Campaigning activity can be legitimate but it must not be the continuing and sole activity of the charity. There is thus a clear difference between the campaigning activities of a charity and those of a political party. The provision of gift aid to charities does not imply that it should be provided to political parties. The Government do not support these amendments, and I hope that—