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Political Parties: Funding

Volume 696: debated on Wednesday 5 December 2007

asked Her Majesty’s Government:

What is their response to the call by the Electoral Commission for more flexible and effective penalties when investigating political party and election finance.

My Lords, the Electoral Commission’s own response to the 11th report of the Committee on Standards in Public Life indicated that it saw its key priorities for the next five years as building its effectiveness as the regulator of party and election finance. The Government have repeatedly made it clear, more recently in their response to the Committee on Standards in Public Life, that they strongly support the Electoral Commission and will work with it to enhance its role as an effective regulator.

My Lords, does the Minister agree that these recurring scandals of party finance diminish us all and diminish our democracy? Is it not time for all parties to return to Sir Hayden Phillips’s report on party funding and put in place a tight cap, some firm regulations and an Electoral Commission with teeth to enforce them?

My Lords, there is much in what the noble Lord has to say. Let me be clear that corruption is remarkably absent from British politics. However, noble Lords will know that all political parties have encountered some problems which have been well documented.

We had the Hayden Phillips work, and the proposals were published in March. There were then cross-party discussions. I urge the party opposite to come back and work through that, so that we achieve a consensus which would undoubtedly be in the public interest.

My Lords, is the Minister not aware that the Conservative Party is happy to rejoin talks if the Labour Party is happy to negotiate realistically on the scandal of affiliation fees to trade unions, whereby if people opt out they get no rebate or if they want affiliation fees going to other parties they do not get them? Is that not the sort of reality we need to debate in future?

My Lords, the Conservative Party’s submission to the Neill committee in 1998 said:

“The question of trade union funding of parties is not a matter of direct concern to the Conservative Party”.

The Conservative Party does not believe that it is illegitimate for the trade union movement to provide support for political parties. The facts are that trade union affiliation and donations are subject to rigorous regulation and that 10 per cent of the affiliated members opt out, so those provisions provide. I say to the noble Lord, Lord Strathclyde, that the Hayden Phillips proposals none the less provide the basis for discussion between the parties. I urge him and his party to come back to those discussions.

My Lords, is the Minister aware that more than a year ago I wrote to the Electoral Commission about an election agent being dismissed by a candidate without said agent having been informed and the election expenses having been submitted without the legal expenses incurred by said election agent being part of the return, which is totally against election law? Its reply stated:

“I am afraid the Commission has no current plans to look at this particular aspect of election law in the near future”.

Is it not a disgrace that something as important as election law is not treated seriously by the Electoral Commission?

My Lords, I am sure that the Electoral Commission will take note of that, but I want to pay tribute to its work.

My Lords, does the Minister recall that as long ago as January the Committee on Standards in Public Life recommended that there should be a strengthening in the powers, resources and responsibilities of the Electoral Commission? This has not therefore blown up recently. Does the Minister also recall that, in that report, the committee wanted to ensure the integrity and public confidence in the system of political party funding and campaign expenditure? While the latest delay has undoubtedly been due to the Conservatives pulling the plug on the Hayden Phillips inquiry, there could surely have been action to strengthen the powers and role of the commission long ago if the Minister and the Government had been prepared to take this matter seriously.

My Lords, of course the Government take it seriously. We had a process, and we have had the recommendations of the Committee on Standards in Public Life. I have already said that we are responding to that. The Hayden Phillips work shows that we are serious in intent; I wish other parties were as serious.

My Lords, on the commission’s powers, the House will recall the Prime Minister saying that the Labour Party is going to return Mr Abrahams’s money to him. Will the Minister confirm that under the existing legislation parties cannot return donations after 30 days of those donations being made, but the commission has ample powers to forfeit those funds? Is that not what the commission should be doing in this case?

My Lords, my understanding is that the Labour Party is continuing discussions with the Electoral Commission about how to return the money. I wish the party opposite was as open in its scrutiny as this party.