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Political Parties: Funding

My Lords, I thank both noble Lords for their comments on the Statement. The noble Lord, Lord Henley referred to this as the squeezed Statement in the middle. I rather thought that we were the generous filling in the middle. We will see where that gets us. I agree that the whole question of party funding is important, as is public confidence. It is a matter of genuine regret that the noble Lord’s party has moved so far from where it appeared to be when the Hayden Phillips proposals were first announced. I remind the noble Lord that his noble friend Lord Strathclyde said on 15 March 2007: "““We … welcome the report. We accept its main recommendations””. [Official Report, Lords, 15/3/07; col. 907.]" What a great pity it is that his party chose to walk away at a moment when agreement seemed possible. I do not usually quote from members of the Liberal Democrat Party, but as Mr David Heath said on 30 October 2007: "““For the Conservatives to now … walk away is a tragedy and is very short-sighted on their part””." Hear, hear, my Lords. As I said in the Statement, the proposal about state funding, which came from the work of Hayden Phillips, helps to acknowledge that if there were a cap on donations, there would be a shortfall in funding. As the Statement makes clear, we believe that there would have to be political consensus on that matter and clear, public support. We do not think that we are in that position at the moment but we stand ready to discuss this further with the political parties. On trade union funding, it is worth recalling that Hayden Phillips said in his work that affiliation fees may be regarded as individual donations, provided that there was transparency and the funds were traceable back to individual donations. I say to the noble Lord that donations to trade unions are already more regulated than donations from other organisations. The new committee’s report of 1998 said that no case for reform in relation to trade unions had been made. I remind the noble Lord that the evidence from his party in 1998 was that it was not illegitimate for the trade union movement to provide support for political parties. I also point out that in 2005, only 45 per cent of political funds from affiliated trade unions went to the Labour Party; that the 10-year ballots that trade unions have to have show continuous support for them to have political funds; and that between 2000 and 2006, only three complaints were received about this matter by the certification officer regarding political funds, two of which were withdrawn and one of which was not upheld. Around 10 per cent of trade union members opt out of making political funds. The trade union and Labour Party organisations have confirmed that they have agreed to respond positively to the Hayden Phillips proposals about transparency and traceability by including clear information about political funds on membership forms and moving over time to full affiliation of all levy-paying members. The noble Lord, Lord Henley, referred to incumbent funds or the communications allowance. That is available to all MPs to enable them to do their constituency role. The communications allowance was unanimously approved by an all-party committee of senior MPs—the Members Estimate Committee—which included Members from his own party. He said that he does not believe that there is an arms race but the reports state that the estimated expenditure of his party and my party in 2005 was £90 million; that is up from £65 million in 2001. I would have thought that that was very clear evidence indeed of an arms race. Given that the talks had gone so well, it was a very great pity indeed that the noble Lord’s party chose to walk away at the last moment. The noble Lord, Lord Rennard, said that the proposals were modest; none the less, they are important. As he said, changes to the Electoral Commission—greater focus on ensuring integrity of the system, greater sanctions, greater investigatory powers and the appointment of commissioners who have some experience of the political process—should enhance its role as an effective regulatory body. On the more fundamental issues, this is not, of course, the last word. I agree with the noble Lord that no one party should have a veto. However, it is in the public interest that we should try to achieve as much consensus as possible.