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Political Parties and Elections Bill

I rather wish that I had not asked. This group of amendments relates to the establishment of a cap on political donations and the treatment of contributions from trade union political funds under such a system. Amendment 108 would place a £50,000 limit on the amount a single donor, whether an individual or an organisation, could donate to a registered political party in any calendar year. A party would be required to refuse donations exceeding this value, and return the excess to the original donor or a person acting on their behalf. The idea of capping donations has been considered and debated many times in recent years. To give a potted history, the noble Lord, Lord Neill of Bladen, who I am delighted to see in his place, considered the merits or otherwise of a cap in the Committee on Standards in Public Life’s landmark 1998 report on the funding of political parties. His recommendation was that a cap should not be introduced. Rather, he proposed measures to introduce full transparency as to the source of all donations above certain specified levels. Donation caps were again considered by the Constitutional Affairs Select Committee on party funding in 2006 and, of course, by Sir Hayden Phillips in his 2007 review. Both of those reports recommended that a cap on donations should be introduced. However—and this point must be emphasised—both were equally clear that such a cap would result in a loss of income for the largest parties. Both reports therefore concluded that the quid pro quo for a cap on donations was an increase in state funding. The Constitutional Affairs Select Committee said that, ""a limit should only be considered within the broader context of a discussion about alternative sources of funding, including state funding, for political parties"." Sir Hayden Phillips said: ""While parties will still, of course, continue to receive donation income, it will necessarily be significantly reduced, and we should all recognise that this may put them in an unsustainable financial position unless public funding is increased"." We must be absolutely clear from the start that these two points—a cap on donations and state funding—are inextricably linked. Calculations made in our June 2008 White Paper, Party Finance and Expenditure in the United Kingdom, indicated that a donation cap of £50,000 would produce a shortfall of £5 million to £6 million each year for the two largest parties compared with the level of donations that these parties may be expected to receive if there were no restrictions. Increased public funding would be needed to make up for this shortfall. Following the publication of Sir Hayden’s report, the parties came together to discuss his recommendations, including those on donation caps and state funding. Regrettably, those talks broke down without cross-party agreement being reached. The Bill before us today does not, therefore, seek to introduce the fundamental package of reforms that Sir Hayden proposed. Rather, it seeks to make changes in those areas where a consensus for change does exist. Making changes to the legislation on party funding without consensus would be hugely destabilising. We cannot allow ourselves to reach a point where the party in power, whoever that may be, feels free to legislate on funding issues to its own advantage with disregard for the views, structure and histories of other parties. I hope that that proposition would receive general support in the Committee.