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Political Parties (Funding)

I realise that the hon. Gentleman has come into the debate only in the past couple of minutes, but he will know that my right hon. Friend the Lord Chancellor and I will be more than happy to have discussions with him about how we take these matters forward. It is vital that political party finances are, and are seen to be, completely transparent and above board. If we are to command high levels of public support, funding arrangements must be fair and transparent. We have gone a considerable way to introducing transparency. With all-party support, we sought to tackle the problem of excessive spending through the Political Parties, Elections and Referendums Act 2000, which reflected the key recommendations of the Committee on Standards in Public Life, chaired by Patrick Neill. It is worth reminding the House of what that Act did. It introduced a national limit on campaign expenditure, created the Electoral Commission, made the funding system more transparent, required all donations above £5,000 nationally and £1,000 locally to be made public, and outlawed foreign donations. It is clear that we now need to move beyond the recent specific issues and consider the basis of the funding of our parties for the future. In the Queen's Speech, we said that we would bring forward proposals to reform party finance and expenditure, and we intend to develop a comprehensive package of reforms building on the principles established by Sir Hayden Phillips's inter-party review, which reported in October. That review, which was supported at the time of his March report by the official Opposition as well as by the Liberal Democrats, identifies important principles that should underpin the way forward. In particular, Sir Hayden identified the key flaw in the system as the political spending arms race, whereby expenditure has spiralled upwards even as party membership has declined. I understand that the official Opposition want to deny that that arms race exists but, given that the money spent between the two main parties in the 12 months before the last general election rose to £90 million, which was nearly 40 per cent. up on the £65 million spent during a similar period in 2000-01, that is clearly what we have before us. Sir Hayden said that the 2000 Act"““sought to control the level of spending, but it has proved inadequate to the challenge.””"