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Political Parties: Funding

Volume 718: debated on Thursday 25 March 2010


Asked By

To ask Her Majesty’s Government whether they have any legislative proposals regarding overseas-based persons making donations to United Kingdom political parties via personal or corporate channels.

My Lords, the Government recently legislated in the Political Parties and Elections Act 2009 to provide that individual donors who give or lend more than £7,500 must complete a declaration confirming that they are resident, ordinarily resident and domiciled in the United Kingdom for income tax purposes. Under the Act, a donation cannot be accepted from an individual if no such declaration has been made. The Government have no further legislative proposals regarding overseas-based persons making donations at this time.

I thank the noble Lord for that Answer. Was it not deeply shocking that in its report of 4 March the Electoral Commission had to admit that it had inadequate investigative powers to analyse completely the complex money flows that have now famously ended up as tainted money in marginal constituencies? Bearing in mind the Chancellor’s remarks yesterday, should not parliamentarians be obliged to answer fully questions from Select Committees and the public?

My Lords, it is right to point out that the commission found in its report on Bearwood that there was insufficient evidence to conclude that there was a breach of the rules in the PPER Act 2000. The commission therefore concluded that donations were acceptable. However, as the noble Lord rightly pointed out, the commission commented that it had sought to interview Conservative Party officials but that, for some reason, the request was declined. I cannot possibly answer why that request should have been declined.

My Lords, does the Minister agree that those in glass houses should not throw stones and that, when a party such as the Liberal Democratic Party accepts a gift of millions of pounds from a crook who is subsequently convicted of fraud, it should return the money to the creditors of that fraudster? Otherwise, does the party not risk being thought implicated in the fraud?

My Lords, this question-and-answer session can develop in one of two ways. Either we can indulge and have fun in terms of the forthcoming election by putting blame on one another, or we can have perhaps a slightly more serious discussion about this issue. It seems to me that no party in this House or elsewhere—except perhaps, of course, the Cross-Benchers—is perfect.

I am most grateful to noble Lords for pointing out that the Bishops are of course absolutely perfect. It is a question of deciding which way we want to go.

My Lords, my noble friend will certainly have read yesterday that this country is going to conclude various tax statutes with different countries. In response to my noble friend’s suggestion that we should take this matter seriously, I propose doing so. What are we seeking from Belize and, if we get it, how will it enable the tax affairs of people who spend a lot of time in Belize but also spend a certain amount of time and money in this country to be more transparent? Will we learn more or will we not?

My Lords, I do not know the answers to my noble friend’s question. Double taxation agreements, one of which, as the Chancellor—famously now—announced, is to be with Belize, protect against the risk of double taxation where the same income gains or assets are taxable in two states. The exact outcome depends on which country is concerned and the terms of the agreement. Where a Peer or Member of Parliament has income, gains or assets in a state that has a double taxation agreement with the UK, they will be taxed in accordance with that agreement. The effect of the provisions in the Bill, which I think is what my noble friend is getting at, will be that MPs and Peers are to be treated like the vast majority of people in the United Kingdom who are resident, ordinarily resident and domiciled in the UK for tax purposes. As such, they will be subject to double taxation agreements in the same way as the majority of people in the UK. The new provisions do not override double taxation agreements.

My Lords, does the Minister have any regrets about the Government’s failure 10 years ago to support amendments that I moved from these Benches that would have banned completely multimillion pound donations to political parties? Does he now recognise that they would have prevented the noble Lord, Lord Ashcroft, from spending the millions of pounds that should have gone to the taxpayer on trying to buy seats in Parliament for Conservative candidates in marginal constituencies?

My Lords, I declare an interest as a former board member of Crimestoppers. Without the initiative, hard work and money of the noble Lord, Lord Ashcroft, Crimestoppers would not exist today, as I am sure other Members in this House who are on the board would agree. I think that it is quite extraordinary—and I ask the Minister for his reaction to this fact—that none of the newspapers has ever mentioned the association of the noble Lord, Lord Ashcroft, with Crimestoppers. Only once has his name been mentioned on the BBC in this context, by a Conservative Member of Parliament. I think that this country owes the noble Lord, Lord Ashcroft, a debt of gratitude.

My Lords, I have done my best in these eight minutes not to enter into the fun and games that all sides sometimes seem to want to have on this issue, particularly in this House. I am sure that the noble Lord, Lord Ashcroft, has done some wonderful things, but I also think that the way in which he has behaved over the past years is not so good.