---

Political Parties: Funding

My Lords, I am, as always, grateful to the noble Lord for repeating the Statement. It has been a pretty extraordinary day, with some three Statements brought before the House by the Government. First, we had the further tragic news coming from Afghanistan and we are shortly to hear from the Foreign Secretary or his delegate in this House, no doubt bringing a piece of white paper to wave before the House, having discussed the Irish referendum with his colleagues in Europe. In between those two Statements, the Government have squeezed in this small Statement on party funding. The noble Lord might think back to that special adviser of one of his former colleagues who talked about a good day for burying bad news. I repeat that. That is what this Statement is about. We all know where the Labour Party’s support is in the polls. We all remember what happened in the recent local elections. We all remember the Crewe and Nantwich by-election. What happened before then to its fundraising? I do not recall any enthusiasm by the Labour Party, when it was doing so well, for bringing forward such proposals as this. We should not complain. This is a case of ““the sinner repenteth””. We all agree that the reform of party funding is part of a programme needed to restore trust in our politics—although I think that keeping promises on things such as the EU referendum are equally important. The noble Lord might consider that as well. There is a perception that large donations—whether by individuals, shadowy purpose-built partnerships incorporated on Fifth Avenue or organisations such as trade unions—can buy undue influence over policy or patronage. That is why we tabled radical proposals in early 2006, why we supported the subsequent appointment of Sir Hayden Phillips and took part constructively in those discussions. As evidence of our commitment, we accepted that as part of an overall settlement, there could be an increase in state funding for parties, even though we neither seek it nor think it desirable. Many people think it would be a sad day if parties became predominantly dependent on the state. Nor do we accept that there is an arms race in spending between the parties. I would like to see what evidence there is beside the assertions in the report from the Neill committee. However, we accepted that there could be overall caps on spending by parties even though all the evidence is that it is how money is raised that the public worry about, not how it is spent. It was explicitly accepted by the then Prime Minister, Mr Tony Blair, that there would be no no-go areas in the discussions. In particular, union funding would not be exempt from any donation caps. Does the noble Lord accept that three things were always understood between the parties: first, that reform had to be comprehensive; secondly, that there should be no cherry-picking of proposals for legislation by the Government to serve their own party's partisan interests; and thirdly, that nothing would be agreed until everything was agreed? There is much in the Statement that is neutral in its effects as between the parties, especially in terms of reform of the Electoral Commission, whose record has been disappointing and which has presided over a calamitous so-called modernisation of our voting systems, which has, as your Lordships' House repeatedly warned, enabled increased fraud and undermined trust in our electoral system. However, there is no cross-party consensus on the key areas of caps on donations and spending, and on additional state funding. The discussions came close to agreement, but will the Minister not accept that they foundered on the key issue of whether trade union donations should be subject to donation caps on the same basis as other donations? Why should they not be? Why did the Minister’s right honourable friend, Mr Straw, refuse to discuss giving union members the right to a real choice over whether to pay the political levy? Could it be anything to do with the state of finances of the Labour Party? Does the noble Lord acknowledge that when less than half of union members vote Labour, let alone want to support it financially—and yet unions declare that 100 per cent of their members are paying the political levy to Labour—the idea that these are voluntary donations carries little conviction? Will the noble Lord also accept that it would be unthinkable for Government to force through caps on what parliamentary candidates can spend from money that they have raised privately, while sitting MPs can spend ever more of taxpayers' money, as they do, on promoting themselves? We came close to an overall comprehensive agreement that could genuinely have started to repair the public's trust in politics. As my right honourable friend Francis Maude said again today, we could still do so. But it would require the Government to accept that dependence on a small number of union bosses has to end. One party's dependence on union bosses must not prevent us getting the reform our politics so desperately needs. We are still ready to work for agreement on fair rules that affect everyone, but we cannot accept a one-sided partisan Bill that the Government intend to bring forward designed to protect the interests of the governing party at the expense of all other parties in the country.