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Clause 48

Permissible donors

Mr. Linton: I beg to move amendment No. 162, in page 29, line 28, at end add--

'(g) an individual who is by reason only of his age incapable of being included in any register of electors and is ordinarily resident in the UK.'.

Madam Speaker: With this it will be convenient to discuss amendment No. 163, in page 30, line 30, at end add--

'(10) No donation by an individual under subsection (2) (a) above may exceed £250,000 in any financial year.'.

Mr. Linton: Amendment No. 162 would allow young people aged under 18 to give money to political parties.

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Hon. Members may be surprised to know that the Bill forbids that. The list of permissible donors says that they have to be registered voters and clearly people cannot become registered voters until they reach their 18th birthday. Clause 61 disregards donations of less than £200. That is usually referred to as the de minimis rule from, I believe, the Latin de minimis non curat lex, which means something like, "The law does not concern itself with trivialities". However, we should be careful here. Calling the measure the de minimis rule does not suggest that donations by under-18s are legal, but merely that they are disregardable. Similarly, clause 61 does not say that donations under £200 are permissible, but simply that they may be disregarded.

The minimum age for joining the Labour party is 15 and I look to Members from other parties to tell me the minimum age for joining the Young Liberal Democrats or the Young Conservatives.

Mr. Forth: Thirty-seven.

Mr. Linton: That is the maximum age, I think. Even the hon. Member for Beaconsfield (Mr. Grieve) has left the Young Conservatives by now, in years if not in spirit.

All three main parties and other parties represented here--Plaid Cymru, I dare say--have youth movements. This is not a trivial point and it is insulting to young people that they should be included in the Bill only as an afterthought. Youth movements should be one of the first thoughts of political parties because there is enough apathy among young people already without giving under-18s who choose to join a political party the feeling that they are not even considered important enough to be declared permissible donors.

I am not suggesting that young people should be asked for a fee of more than £200 a year to join a political party, but we should make donations from under-18s permissible, along with those from over-18s. Under-18s may want to donate more than £200 and it is not the Bill's function to make that illegal. I have made that point to my hon. Friends, who said that it is of no consequence, but it is a complete oversight that no one has realised, until this point, that the Bill does not allow such donations. I have two daughters who joined the Labour party as teenagers and I would like to protect the interests of all young people who want to join political parties. It is excellent for them to show interest in the political arena at that age and I hope that my hon. Friends will agree to the amendment simply to clarify the status of young people.

Amendment No. 163 proposes an upper limit on permissible donations from an individual. I do not deny that £250,000 is an arbitrary figure, but any figure will be called arbitrary. The Liberal Democrats proposed £50,000 in their evidence to the Neill committee. I think that that is a bit low. I dare say that donations of £50,000 or £100,000 are all too infrequent, but they are unlikely to buy favours from a Government. We run the risk of creating that perception if we allow individual donations of more than £250,000 or £500,000. As a donations limit, £250,000 is a high figure.

10.15 pm

In Quebec, parties are legally not allowed to accept donations of more than $3,000, which is about £1,500.

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In the United States, individuals cannot give more than £17,000 in total, which is $25,000. It is true that there are currently proposals in the US to increase that figure, but only to $50,000, which is nowhere near the figure proposed in the amendment. I do not know whether the hon. Member for Beaconsfield can give me the figure, but there is certainly a donation limit in France as well. The amendment proposes a much higher limit, because we should allow as much freedom as possible and go for the mischief in the system--the individual £1 million donations.

In its evidence to the Neill committee, the Labour party left the issue of donations limits open. It said:

The Neill report came out against donations limits for a number of reasons. It felt that disclosure of donations above £5,000 would continue the arms race between the main parties. I find that naive if not disingenuous, because many countries have disclosure--the United States has had disclosure of donations above $100 for the past 25 years--but that has not stopped people making donations: it has merely made them more blatant. Anyone who knows anything about the United States political system will know what I mean.

It is argued that if there were a limit on donations, it would be easy to evade it by spreading resources among friends, setting up subsidiary companies and using other such easy devices. The Bill makes it illegal to spread donations among friends or even among members of the same family. In Quebec, big companies used to be able to get round the donations limit of $3,000 by handing out money to a group of executives who would each write a personal cheque for $3,000--typically at a Liberal party lobster dinner or some such event.

Mr. Stunell: The hon. Gentleman is kidding.

Mr. Linton: Indeed, yes. The Liberal party in Canada is much richer than the Liberal Democrats in this country. The electoral commission in Quebec was well up to plugging those gaps when they appeared. There will always be attempts at evasion, as with any taxation system, but it is perfectly possible to impose a donations limit and to make it stick.

A third argument that has been used is that the proposals on tax relief, which the House discussed earlier, would encourage parties to switch from a few big donations to a large number of small ones. The Neill committee said that

The Neill committee regarded its proposal for tax relief on political donations as a substitute for an upper limit on individual donations. As the House has rejected the proposals for tax relief, the logical other side of that coin is to entertain the arguments for an upper limit on individual donations. That would be in keeping with the logic that the Neill committee used.

The argument against a donations limit, which is in the Neill committee report, is that individuals should have the freedom to contribute to political parties, and parties should be free to compete for donations. We have seen what happens when parties compete for big donations. I only have to mention Asil Nadir, John Latsis, Li Ka-shing,

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C.K. Ma and, indeed, Bernie Ecclestone. Before the election, Labour had no choice but to try to match Tory spending by seeking large donations. Now we are in government and introducing a Bill on the subject. Not only Labour Members but the whole House have a chance to close that door for ever and to ban funding of political parties in this country by individual millionaires.

The amendment deals simply with individual donations because I do not think that corporate donations of more than £1 million from, for example, trade unions or companies are necessarily a problem. It is individual donations that render parties vulnerable to corruption or to the perception of corruption. No matter how well intentioned, a party that relies on individual £1 million donations will always feel beholden to the millionaire donor, will always feel nervous of offending that person, and will always feel anxious not to jeopardise the possibility of another donation.

After the last election, many people said, "Thank goodness. Never again will we see political parties funded in that way." Many of the electorate felt that, with the election, we were turning a new leaf and that there would be a new chapter in which such funding would never need to occur again. Even at this late hour, I hope that my right hon. and hon. Friends will see that funding is the crux of the Bill and that, if we do not close that door, we will not have completed the task that we have set ourselves in the Bill. It is a question not just of the size of donations, but of the vulnerability of political parties.

Mr. Walter: Will the hon. Gentleman give way?

Mr. Linton: No, I am just finishing my remarks. I am sorry.

It is a question of the perception in the public's mind of corruption. The Bill should deal with those issues.

Mr. Grieve: The hon. Member for Battersea (Mr. Linton) has raised two interesting amendments, although I am slightly more interested in, and possibly sympathetic to, one than the other. Perhaps I can start with the one with which I have some sympathy, albeit that I do not think that it necessarily goes as far as he would wish: amendment No. 162.

There is no doubt that the hon. Gentleman has identified what might potentially be a problem with the Bill. Notwithstanding the comment by my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) about the minimum age, in practice, of membership of the Young Conservatives, I believe that we admit persons over the age of 15 to membership of the party. They would be incapable of making a donation of more than £200.

The hon. Gentleman makes a good point--whether a donation of under £200 from an impermissible donor is ipso facto permissible. I shall be interested to hear the Minister's comments about that. In reality, it never has to be declared, so it would never be identified, but the hon. Member for Battersea certainly has a point. If the Bill

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criminalises the acceptance of a donation of £5 from a 16-year-old for his annual membership of the Conservative party, that will pose a problem.

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