My Lords, it is a great pleasure to follow the noble Lords who have already spoken. I will speak briefly about Amendment 67. This amendment would require the Secretary of State to establish an independent committee to report on the creation of what I call a foundation for democracy, whose sole aim is to prevent the rich and corporations from directly funding political parties and hijacking the political system. Private money in our political system is a cancer, and the issue has not really been adequately addressed by this Bill.
In 1863, US President Abraham Lincoln visualised democracy as a
“government of the people, by the people, for the people”.
Some 160 years later, that remains elusive—we are light years away from it. Yes, people vote, but political power is increasingly concentrated in the hands of those who can fund political parties and get favour in return. Their preferences are prioritised.
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If we had a Government of the people and for the people, we would not have millions using food banks to make ends meet, even though they work full-time. We would not have 14.5 million people, including 4.3 million children, living below the poverty line. We would not have 3 million people suffering from malnutrition and undernutrition, of whom about 1.3 million are retirees. We would not have a situation where the poorest 10% of households pay 47.6% of their income in direct and indirect taxes, while the richest 10% pay only 33.5% of their income in direct and indirect taxes. None of this suggests that we have a Government of the people and for the people.
The phrase “political donations”, which has been used throughout this debate, is a misnomer. Corporations and the rich do not make donations; they make an investment, and they want a return on that investment. That is usually in the form of poor laws and poor law enforcement. Does anyone know how many banks have been prosecuted for banking frauds? Why has the Lloyds bank fraud, going back to 2005, still not been investigated? Why is it that no accountancy firm that has sold unlawful tax avoidance schemes—that is what the judges have said—has yet been investigated and prosecuted? It is because we do not in fact have Governments that are closer to the masses. Party funders have the inside track to Ministers and policymakers. They get the private phone numbers of Prime Ministers and then, on the phone, Prime Ministers tell them, “Yes, we promise there will be no tax increase if you conduct business in the UK”—as Prime Minister Boris Johnson told Sir James Dyson.
Big accounting firms could not get into the public sector audit market because the Audit Commission did not think that they were up to the task. So they campaigned for the removal of the Audit Commission and contributed extensively to the Conservative Party. Hey presto—the Conservative Party decided to kill off the Audit Commission through the Local Audit and Accountability Act 2014. Big accounting firms are now raking in fees of more than £100 million a year from local authority audits. That is the investment that they made, and it paid off.
Private funding of political parties is destructive. Political parties are now addicted to corporate money for their election campaigns. Trade unions have had to join this kind of nuclear war as well, but of course they do not have sufficient resources to match those of corporations. Ministers and party leaders are more likely to have lunches, dinners and meetings with corporate grandees than with the victims of corporate abuses. I cannot recall a Minister meeting victims of banking frauds or those suffering the abuses of the insolvency industry. I am told that around £50,000 enables the wealthy to buy a seat at a party conference dinner table with senior members of the Cabinet and so that they can burn their ears and suggest what kind
of favours they need. I cannot remember Ministers sharing dinner tables with homeless persons, a pensioner who is freezing to death or those queuing for food banks. They simply cannot afford to enter that kind of a bargain or that market. So we do not have a citizen-led democracy; its possibilities are increasingly stymied by political parties selling themselves to the highest bidder, regardless of the adverse consequences for the people. Urgent action is needed to build democracy and remove the corrosive effect of private money from politics.
Some would like to ban corporations and rich individuals from funding political parties altogether, but banning things becomes difficult. No doubt those who are addicted to funding the political parties would say it is a violation of their democratic right, or some right, to fund political parties. These people would always find ways of getting around the laws. We need to think of smarter ways of dealing with this.
My amendment advances an alternative approach. Under this, there would be absolutely no ban on political contributions: anyone from anywhere in the world would be able to donate money. However, no political party would directly receive a penny from these individuals. All the money would go directly to this foundation for democracy, which would be under the control of the Electoral Commission. Then, at regular intervals—it could be monthly—the foundation would allocate the money to political parties on the basis of a formula based upon their share of the vote in local, regional and national elections and party membership. So, if a party improves the quality of life for the people and therefore has higher membership or a higher share of the vote, it would get more resources. Parties like to compete on ideas, so this policy would say, “Go ahead: compete and persuade people to see what good you can do for them.”
Many corporations have obviously got used to buying political influence, and they will not be happy about such a proposal. They may cease funding the political parties. If that is what they do, we will know that they were in it only so that they could get political advantages and that there was absolutely no other reason. Perhaps at that point, we may also begin to consider other alternatives, some of which have been mooted, such as capping political donations.