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Mr. David Winnick (Walsall, North) (Lab): Does my right hon. Friend agree that there is scope for political parties to spend less before there is any question of further funding, particularly from the state? In addition, is there not a strong case for an immediate inquiry into the midlands industrial council? It is a sinister organisation—it is not accountable in any way, and it makes a mockery of the reforms that the Government have brought about.

Mr. Straw: I strongly agree with my hon. Friend’s latter comments. I recall that when the Political Parties, Elections and Referendums Act 2000 was considered in the House, there were high-sounding comments from the Opposition, who said that they wished for as much transparency as we and the Liberal Democrats wished for. Such comments have been repeated, but I note, too, that the Conservative party exploited a loophole in the law that allowed unincorporated associations, such as the midlands industrial council, to give thousands and thousands of pounds to local constituency associations without the latter accounting for that or providing any details about who was behind those shady organisations until it was forced out of them.

Mr. David Heath (Somerton and Frome) (LD): I do not expect the Leader of the House to pre-empt the report from Sir Hayden Phillips, which is due later in the week, but if we are to achieve consensus, there are three essential ingredients, and he has already touched on some of them. First, there must be proper capping of individual contributions. Secondly, there should be a firm regime to prevent the abuse of enormous spending in constituencies outside the election period particularly, as often happens in marginal constituencies. Thirdly, there should be proper transparency about the way in which all parties are funded, and no more secret clubs and cabals.

Mr. Straw: I agree strongly with the hon. Gentleman’s second and third points. As far as his first point is concerned, when the Neill Committee on Standards in Public Life reported in 1998, it recited all the changes that had been made in respect of the trade union donations to the Labour party and concluded:

There has been no evidence since of any case for change.

The idea of caps on donations sounds interesting, but in the United States it has spawned a vast evasion and avoidance industry. We are more likely to get true transparency if we have controls on spending that apply at all levels of political parties’ spending and in respect of all kinds of donors, including shady organisations such as the midlands industrial council.

Kelvin Hopkins (Luton, North) (Lab): My right hon. Friend has touched on the point that I wish to make very strongly. There is a strong body of opinion in our party that there should be much lower limits on spending, which should be much better policed, so that no party becomes the hireling of big business, rich people or, indeed, the state. We should retain our independence by having much lower levels of spending and, therefore, much lower levels of donations.

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Mr. Straw: The truth is that there is effective, or relatively effective, control during the short election period defined in the 2000 Act, but there is no control during the much longer period before elections, notwithstanding the fact that because elections take place almost every year, campaigning is now almost continuous. I hope that we can achieve a consensus between the parties that the issue of control of campaign spending at all times is what most needs to be properly addressed.

Mrs. Theresa May (Maidenhead) (Con): I have listened with care to what the Leader of the House has said, and he will know that in the spirit of consensus we have put forward a series of serious proposals for party political funding, prepared by my hon. Friend the Member for Chichester (Mr. Tyrie). Unfortunately, the Leader of the House has already set his face against elements of those proposals. Does he not accept that whatever else the Government might do about the funding of political parties, if they do nothing about the significant contribution to the Labour party by the trade unions, the public will remain rightly sceptical about the influence that continues to be wielded by the unions on this and every other Labour Government?

Mr. Straw: The Conservative party has always dined out on the fact that the Labour party and the trade
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union movement are in close association. It can continue to do so for as long as it wishes; that is entirely its right. What is not its right is to seek partisan advantage by forcing through changes in the financing regime, which would have the effect of wholly disadvantaging one political party and forcing changes in our constitution, when no such changes have been forced on the Conservative party —[ Interruption. ] The right hon. Lady says from a sedentary position that there would be a cap on business donations, too, but she knows very well that her party decided to focus on the trade unions continuously during the 18 years of Conservative government from 1979 to 1997. They changed the law and they changed the law and they changed the law again, but they did nothing whatever in respect of companies, so much so that in 1998 the Neill Committee on Standards in Public Life said that it had received no evidence of any case for further changing the law. I have challenged the right hon. Lady and the hon. Member for Chichester (Mr. Tyrie) as to whether there is a scintilla of evidence of any mischief in the way in which the regime for trade union funding of political parties has altered since then. The answer is that there is absolutely none. What we have had, however—

Mr. Speaker: Order. We have run over by four minutes and we must move on.

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Northern Ireland

3.34 pm

The Secretary of State for Northern Ireland (Mr. Peter Hain): With permission, I wish to make a statement on political progress in Northern Ireland.

Between 11 and 13 October in St. Andrews, both the British and Irish Governments engaged intensively, late into the night and from early morning, with the Northern Ireland political parties. That we were able to defy the sceptics and cynics, and secure the St. Andrews agreement, opens the way to a new dawn for democracy in Northern Ireland: a new democracy based—for the very first time in Northern Ireland’s tangled history—on the twin foundations of the rule of law and power sharing. Without question, it may come to be seen as a pivotal moment in Irish history.

Those two foundations stand together or fall together: on the one hand, unequivocal support for the police and unequivocal support for the rule of law; on the other an absolute commitment by all the parties to share power in a restored Northern Ireland Executive. Delivery on both those foundations was absent from the Good Friday agreement; now it is in prospect. That is a measure of what was achieved at St. Andrews—arguably the fulfilment of the hopes expressed on Good Friday eight years ago. The agreement has been placed in the Library and is available in the Vote Office.

All the parties at St. Andrews were crystal clear on one point at least: in May, Parliament had legislated for closure, one way or the other, on the political process. Four years since the Executive and Assembly last sat, there had been set in statute a clear end point— 24 November—by which the political parties would agree to locally accountable government for the people they represent, bringing direct rule to an end. The alternative, as I have made clear, is that the Assembly would dissolve. Incidentally, were the parties to unravel St. Andrews at any stage in the coming weeks and months, dissolution would follow as night follows day, and both Governments would move on to formulate plan B. There is not a choice between St. Andrews and something else; there is a choice only between St. Andrews and dissolution.

Since the House set the 24 November deadline in statute, there have been important indicators that the context within which political development can take place has been changing: changing fundamentally, changing for the better and, I personally believe, changing for good. Northern Ireland had the best parading season for four decades, with not a soldier on the streets on 12 July—something unthinkable just a year ago, when 115 live rounds were fired by loyalist paramilitaries at police and soldiers during the Whiterock parade. This year, Whiterock passed off peacefully, following a cross-community dialogue.

Loyalist leaders have given me assurances that, as the IRA has done, they will now work to ensure an end to their paramilitarism and criminality. Last week, for the first time ever, the leader of the Democratic Unionist party, the right hon. Member for North Antrim (Rev. Ian Paisley), met the Catholic Primate of Ireland, Archbishop Brady. The House will want to congratulate the right hon. Gentleman and Baroness Paisley on their 50th anniversary last Friday.

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Over the summer, the preparation for government committee, with all the parties face to face in the room, did important and constructive work on a range of issues central to the good governance of Northern Ireland. Above all, there has been further compelling evidence that IRA violence has indeed ended, a judgment confirmed decisively on 4 October in the report of the Independent Monitoring Commission, which also confirmed in paragraph 2.17:

The Government firmly believe that the circumstances are now right to see a permanent political settlement in Northern Ireland, with the restoration and the full and effective operation of the political institutions. Anyone with experience of the political process in Northern Ireland will know that it is never easy, that the negotiations are always tortuous and tough, and that there is always a danger of things unravelling. St. Andrews, like Good Friday, was no exception; but the harder the negotiations, the more likely it is that any agreement that comes out of them will stick.

There were two main issues to be resolved at St. Andrews if we were to achieve restoration of the power-sharing Executive: the need for support for policing and the rule of law across the whole community, which would enable, in due course, the safe devolution of policing and justice to the Assembly; and changes to the operation of the Good Friday agreement’s institutions.

On support for policing, I want to spell out to the House what that means by referring to paragraph 6 of the St. Andrews agreement. It means fully endorsing the Police Service of Northern Ireland. It means actively encouraging everyone in the community to co-operate fully with the PSNI in tackling crime in all areas. It means playing a full and active role in all the policing and justice institutions, including the Policing Board.

For many years now, all in this House have joined the Government in demanding support for the PSNI from every part of the community. My hon. Friend the Member for Foyle (Mark Durkan) and his Social Democratic and Labour party colleagues—especially John Hume—have shown courageous leadership in making that a reality. With one in five—rising to one in three—PSNI officers now Catholics, and the service deploying with local consent right across Northern Ireland, including south Armagh, policing has been transformed.

But no one present will now underestimate how significant it will be if the republican movement can accept and endorse the agreement drawn up at St. Andrews. Based on last week’s discussions, I am confident that it will do so, and that that will make for a decisive and irrevocable break from a past of violence and criminality. It will give absolute confidence in an authentically new Northern Ireland of hope and peace and the rule of law. I believe that, when that active support for policing and criminal justice is seen to be delivered, there will be sufficient community confidence
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for the Assembly, in line with the St. Andrews agreement, to request the devolution of justice and policing from the British Government by May 2008.

It is important to acknowledge, however, that devolution of policing is already very substantially down the road. Following the Patten report, direct rule Ministers relinquished matters of real importance. The PSNI has already been accountable for five years to the Policing Board, comprising local elected and independent representatives, to the Police Ombudsman for Northern Ireland, and to district policing partnerships. The remaining devolution of policing and justice is largely institutional, focusing more on the courts and the administration of justice than on operational policing, which in the past has been so controversial to nationalist and republican communities.

Although nationalists and republicans had major concerns over the primacy of national security being vested in the Security Service, the St. Andrews agreement makes it clear in annexe E that there is full accountability for all domestic operational security matters, because they will be exclusively undertaken, not by MI5, but by the PSNI, which is, of course, fully accountable in Northern Ireland—including those of its officers who may be secondees to MI5. We stand ready, moreover, to develop procedures and establish protocols on MI5’s activities, to provide any reassurances necessary on accountability.

Taking Northern Ireland out of a divided past and into a shared future can be done only on the basis of agreement on fundamental principles: the principle of consent; the commitment exclusively to peaceful and democratic means; the sharing of power within a stable, inclusive partnership government; equality and human rights for all; and mutually beneficial relationships developed between north and south and within these islands. Those are the fundamental principles of the Good Friday agreement, and they will always remain the bedrock and foundation of the political settlement in Northern Ireland.

However, the Good Friday agreement allowed for changes to be made to the operation of the institutions to make them more responsive and effective, and, following discussion with all the parties, we have made an assessment of them in annexe A. The Government will introduce legislation to enact appropriate changes and other aspects of the St. Andrews agreement before the statutory November deadline, once the parties have formally endorsed the terms of the agreement and agreed on that basis to restore the power-sharing institutions.

We have now set out a clear timetable for restoration. Tomorrow, a new programme for government committee will begin regular meetings at Stormont to agree priorities for the new Executive. Crucially, parties will, for the first time, together be represented at leadership level on that Committee, as on the existing preparation for government committee.

We have asked the parties to consult on the St. Andrews agreement, and to respond by 10 November to allow time for final drafting of the Bill to be taken through the House. Once that happens, and on the basis that the St. Andrews agreement is endorsed, the Assembly will meet to nominate the First Minister and Deputy First Minister on November 24, the deadline for a deal.

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I do not have to spell out to the House the great significance of these nominations, the more so given those who are likely to be nominated: the leader of the DUP and Sinn Fein’s chief negotiator. I pay tribute to the right hon. Member for North Antrim; like anyone who understands something of the history of Northern Ireland, I realise that this is not an easy step for him or for his party.

In January, there will be a report from the Independent Monitoring Commission. In March, the electorate will have the opportunity to endorse the St. Andrews agreement either through an election in Northern Ireland or through a referendum. We will listen to the views of all the parties before making a decision on the most appropriate way of consulting the electorate and legislating accordingly. Either way, the people will speak.

On 14 March, prospective members of the Executive will be named by their party leaders. On 26 March, power will be devolved and d’Hondt will be run. This is an ambitious programme and there is still work to be done, but I do not think that Northern Ireland has been at this point before. It is a tribute to my right hon. Friend the Prime Minister, the Taoiseach and both British and Irish officials, who have worked tirelessly over so many years, that we are at this point. Their energy, time and patient attention to the detail of this issue has been unprecedented. But above all, it is a tribute to all the political parties in Northern Ireland—all of them—which have shown courage and leadership and taken risks for peace and political progress. They have shown that there can be accommodation and agreement without sacrificing either principle or integrity.

Friday 13 October was a good day for Northern Ireland. It has the potential to be greater still—to be the foundation stone of a new Northern Ireland based exclusively on the principles of peace, justice, democracy and equality. Whatever the difficulties that lie ahead, I trust that none of those who took part in the talks at St. Andrews last week will lose sight of that great prize.

Mr. David Lidington (Aylesbury) (Con): I am grateful, as always, to the Secretary of State for his courtesy in giving us early sight of his statement. I welcome the progress made in the negotiations at St. Andrews and the positive approach adopted by each of the parties. Let me be clear that I congratulate the Prime Minister, the Secretary of State and the leaders of all the Northern Ireland parties on what is clearly a major step forward, but we are absolutely clear that, for this initiative to succeed, it is essential for Sinn Fein finally to deliver on policing.

Power sharing in Northern Ireland will not work unless every Minister in the Executive fully supports the police, the courts and the rule of law. In that context, I welcome the press reports over the weekend that the Government are now planning to amend the ministerial pledge of office to make such support a requirement of taking office. May I gently remind the Secretary of State that, when the Opposition sought to do that earlier in the year through amendments to the Northern Ireland (Miscellaneous Provisions) Bill, we were told that it was unnecessary? I am glad that Ministers have changed their minds, and I ask the Secretary of State whether he is able this afternoon to be more specific about the changes that he would like to see.

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