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Mr. Andrew Mackay (Bracknell) (Con): The Leader of the House, in rightly commending the review, said that the conclusions would be underpinned by the creation of a level playing field to which we would all agree, so may I ask him to turn to local funding? By allowing all of us to have up to £10,000 extra a year as a communication allowance and allowing some of our incidental expenses to go towards campaigning effectively in the constituency, do not we put those who
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are not incumbent at a disadvantage? When he reaches the conclusion of his all-party discussions, it must be right that other parties in a constituency should be able to spend the same amount as the incumbent Member.

Mr. Straw: I say to the right hon. Gentleman that there will be a debate on the recommendation of the House of Commons Commission in respect of the communications allowance. As he will see when the report is put forward, that is about communicating in respect of our parliamentary duties and it actually proposes tightening up considerably the way in which the existing incidental expenses provision is currently used and restricting the amount that can be spent on franked envelopes from no limit at the moment to one that Mr. Speaker will set at £7,000. Yes, some additional funding will be provided for communication by Members of Parliament and all the evidence suggests— it is not a party issue at all—that that is necessary if we are to inform our electorates better. However, that will take place in more strictly controlled circumstances.

I do not want this issue to be thrown across the Chamber, but if we are talking about the amount of money that is spent locally, it has to be said that even the communications allowance will pale into insignificance compared with the amount that Lord Ashcroft is already spending and spent at the last election. He made a significant speech the other day in the other place in which he set his face against any idea of spending limits, and said that parties want to spend whatever they can. He reinforced that view in an aptly entitled book on the 2005 elections called “Dirty politics, Dirty times”.

Mr. Chris Mullin (Sunderland, South) (Lab): There is a great deal to welcome in Hayden Phillips’ report. I agree with my right hon. Friend that what most damages the public perception of British politics is the suggestion that the main political parties to a greater or lesser extent are in hock to a handful of extremely wealthy individuals. As regards the political levy, does he agree that 3 million to 4 million people paying £3 or £4 voluntarily a year is the nearest thing that we have to mass politics in this country and that we ought not to throw it away lightly?

Mr. Straw: I agree with both my hon. Friend’s propositions. On the political levy, I want to say that the proportion of members of trade unions that are affiliated to the Labour party and who pay their political levy varies. It was 80 per cent. a few years ago; it is currently 90 per cent. The number of individual trade unionists who pay varies and there is a change year on year. What that shows is that trade union members are well aware of the fact that if they pay the political levy and their trade union is affiliated to the Labour party, part of the money—part only—will go to the Labour party. It is transparent and highly regulated in a way that much else in the current political funding regime is not.

Sir George Young (North-West Hampshire) (Con): Has not Hayden Phillips done an heroic job in narrowing the gap that existed between the parties a year ago and in setting out some general principles on which we should all agree? However, there is still a gap that we need to address. Of course, Opposition Members should listen to the legitimate concerns expressed by Labour Members, and some of them have been aired in this exchange. However, can the Leader of
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the House for the third time try to answer a question that has been put to him—whether he agrees that a limit on donations from trade unions

Is his party interested in pursuing what, on page 10 of the report, Sir Hayden regards as a “reasonable outcome”?

Mr. Straw: I thought that I had answered the question, and I apologise if I have not. Of course, the limit need not challenge the relationship—some suggestions are set out on page 10—but that depends not just on us but on the Conservative party. This is not a symmetrical issue. The Conservative party has issues with us and we have issues, as it were, in the other direction. [ Interruption. ] I am trying to be helpful, if the right hon. Member for Maidenhead will stop muttering.

I understand any Opposition party’s concern about incumbency and I obviously appreciate the fact that under our system—indeed, under virtually any system that we can think of—elections are fought out in marginal seats. Sir Hayden understands that and he has come forward with suggestions that try to take account of the fact that, as we all know, in safe seats the level of expenditure both at an election and well before it is very different from that in marginal seats. If there are to be limits, however flexible they are, they have to apply everywhere.

Dr. Tony Wright (Cannock Chase) (Lab): Sir Hayden Phillips was given the impossible task of seeking consensus where no consensus exists and he has performed that task heroically. He now says that we have to move on to further inter-party talks to resolve the real issues at stake. However, he says that that will be accomplished satisfactorily only if there is independent oversight of such talks. What is my right hon. Friend’s view of that?

Mr. Straw: My right hon. Friend the Prime Minister, in the written statement that he issued this morning to accompany the publication of the report, has already welcomed Sir Hayden’s offer that he might chair those further discussions. We will discuss the modalities of the discussions; none of us wants to waste Sir Hayden’s time. My feeling is that we will probably wish to see some staff work and work by the three parties directly, as well having Sir Hayden chair some of the talks. However, I also endorse the point made by the hon. Member for Somerton and Frome (Mr. Heath) that if this is going to work, no party should have a veto and all parties should take account of the legitimate interests of the other parties round the table. That is the only way forward. However, in the end, the House will have to make its own judgments.

Mr. Angus MacNeil (Na h-Eileanan an Iar) (SNP): Sir Hayden Phillips says that the practicalities have yet to be worked out and he refers to the three main parties. I would argue that that is perhaps an oversight. If yesterday’s edition of The Times, with its headline “Nationalists set for stunning victory in May”, is to be believed, the Scottish National party would become Scotland’s biggest party. Given the cash for peerages scandal that the SNP played a modest part in exposing and the exploitation of the loopholes in the 2000 Act, we are where we are.
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However, with the special situation in Scotland, should the SNP not be involved? Sir Hayden has said that he wants this process to be fair and transparent, and I would put the emphasis on fairness.

Mr. Straw: I am happy to talk both to Sir Hayden and to representatives of the hon. Gentleman’s party and Plaid Cymru about how they can be involved in the talks.

Mr. David Winnick (Walsall, North) (Lab): A good deal of the spending nationally at election time on posters, for example, is, as we all know, a complete waste of time and has no effect on the result. However, does my right hon. Friend not agree that having a firm legal limit on local spending but no limit during elections makes a mockery of the legal limit, especially since so much of the money is donated between elections by secretive, anonymous business organisations accountable to no one?

Mr. Straw: I agree with my hon. Friend. One of Sir Hayden’s important recommendations is that the loophole that allowed secretive third-party organisations, such as the Midlands Industrial Council and many others, to fund the Conservative party should be plugged, so they are subject to the same rules on transparency as political parties.

Mr. Desmond Swayne (New Forest, West) (Con): The amount of money spent by my political party on the last two general elections should serve as a powerful corrective to any notion that it is of any value whatsoever. If there are to be local limits, does the Leader of the House agree that there should also be rather more rigorous scrutiny of the existing rules about how allowances are spent locally?

Mr. Straw: The hon. Gentleman speaks for himself, but I note that he is the Parliamentary Private Secretary to the Leader of the Opposition, so his view makes a refreshing change. I agree with him. Many wise souls in the Conservative party as well as in our party believe that an awful lot of the money that is spent—£90 million at the last election—is wasted.

To pick up a point that has just been raised with me, I think that there is a case for examining whether voluntarily or by regulation we ban the use of posters. As far as I can tell, the only people who benefit from the posters are those who have the poster sites. The number of so-called salients and members of public who take any notice of them has dropped. Just as we are banned from advertising on television and radio, it would be a huge relief to us, and moreover to the voters, if they did not have to suffer the visual pollution of posters from all three parties, particularly in marginal seats.

Several hon. Members rose—

Mr. Deputy Speaker: Order. If the Leader of the House promises me that he will be very brief in his answers, I will try to call all Members who are seeking to question him.

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Andrew Miller (Ellesmere Port and Neston) (Lab): Given that every trade union member can trace back their donations made under the trade union levy through headquarters accounts and given that those accounts are properly audited by external bodies and have the oversight of the trade union commissioner, is it not a reasonable proposition for those donations to be counted as individual donations?

Mr. Straw: That is one of the suggestions made by Sir Hayden, and one that we must take account of in the discussions.

Kelvin Hopkins (Luton, North) (Lab): Following the theme of the contributions from many Labour Members about caps on spending, does my right hon. Friend agree that having much lower levels of spending, rigorously enforced, with severe criminal penalties, would solve all the problems? Lord Ashcroft could keep his money and stop trying to buy elections for the Conservatives.

Mr. Straw: I agree. If one compares the examples of Canada and the United States, there is no question but that it is the arms race on spending that is the mother and father of the current problems.

Mr. Frank Doran (Aberdeen, North) (Lab): Does my right hon. Friend agree that the discussion on trade unions needs to be put in context? Since 1906, only one segment of our society has been restricted in the political donations that it can make: the trade union movement. As he has quite rightly pointed out, in 1992 that was strengthened even further. During a temporary absence from this place, I was responsible for the second round of political fund balloting for about 5 million levy payers. Does he agree that further restrictions and a further regulatory burden placed on unions would be unfair and, further, that the focus is being shifted away from where it should be: the excessive spending, particularly at a local level?

Mr. Straw: I agree with my hon. Friend. It seems to be a temptation in the bloodstream of the Conservative party to attack the funding of the Labour party.

Angela Eagle (Wallasey) (Lab): Does my right hon. Friend agree with me and the Hayden Phillips report that it is now in the public interest to have rigorously enforced expenditure caps in order to deal with the huge escalation in expenditure on elections, which is against the public interest and threatens to take us in the same direction as the United States? Following his comments on the potential banning of the use of poster sites, does he agree that allowing—as they do in the midlands and in Northern Ireland—political parties to put up much cheaper posters on lamp posts achieves the idea of telling people that there is an election on? That should be allowed.

Mr. Straw: I agree with my hon. Friend’s first point. [ Interruption. ] Personally, although this is subject to immediate disagreement on the Front Bench, I also agree with her second point. I am envious of the way in which the west midlands handles the matter. It is a good idea and, of course, it is cheap.

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Mr. Barry Sheerman (Huddersfield) (Lab/Co-op): What does my right hon. Friend think that the time dimension on all this is? There are those of us who have always believed that the great boast of British politics is that we do not spend much money. Clean politics is cheap politics. What worries me is that in some constituencies at the moment, as we all know, the Ashcroft money is swashing about. It is pouring in. We know that that is not really what most sensible people on the Opposition Benches want either. Often, it swashes around with particular kinds of Tories, not the average Tory.

Mr. Straw: We want to move as quickly as possible. We know that there is deep anxiety in the more sensible parts of the Conservative party about the fact that Lord Ashcroft is trying to buy up part of that party.

Mr. Tom Watson (West Bromwich, East) (Lab): Sir Hayden has now completed his task and, whether he was within his remit or not, that work is done. However, Sir Hayden does not have the monopoly on good ideas for party reform. There are other academics in the country who have come up with alternative, but similar proposals. May I ask my right hon. Friend to look at the work of Professor Keith Ewing, and perhaps if we are taking this further, to try to include other academics in our further deliberations?

Mr. Straw: Sir Hayden would not suggest that he has a monopoly on good ideas and of course we are ready to take account of any sensible suggestions.

Martin Linton (Battersea) (Lab): In welcoming my right hon. Friend’s statement, may I urge him to bring forward a Bill as soon as possible to deal with the Ashcroft loophole, if necessary ahead of the party talks? It is imperative to deal with this matter well in advance of the next election. Will he also reject the view of the Phillips report and of the official Opposition that the same donations limit should apply to individuals and to organisations? Many other countries have different donation limits for individuals and organisations and it would surely be an interference in the Labour party’s constitution if the measure was imposed on us. May I also—

Mr. Deputy Speaker: Order. I heard one “also”; the second “also” gives a warning sign.

Mr. Straw: My hon. Friend has taken a long interest in this matter, and moved provisions relating to donation limits in the proceedings on what became the 2000 Act. Sir Hayden makes a suggestion about the way in which the current levy paid by 3.5 million trade unionists should be treated for the purposes of any changes. On having legislation in bits, I think that, in the real world, we need to see whether we can reach agreement on a comprehensive package.

Dr. Alan Whitehead (Southampton, Test) (Lab): Does my right hon. Friend agree that it is possible to resolve the issues concerning the input of money into local political activity that Sir Hayden Phillips sets out in his report? Does he consider that the Electoral Commission could play a substantial role in auditing and maintaining those arrangements, as Sir Hayden Phillips mentions? Does he consider that, among other things, the addition of commissioners with a political
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background and understanding to the Electoral Commission would be helpful in that respect, as Sir Hayden Phillips also mentions in his report?

Mr. Straw: Yes. Sir Hayden makes some important recommendations, which I think are already agreed between the parties, for major reforms to the Electoral Commission, to make it, as he says, smarter, to separate its educative role, and to make it better at regulation. Crucially, not only the Constitutional Affairs Committee and Sir Hayden Phillips, but the Committee on Standards in Public Life, have all recommended that there have to be people among the commissioners who understand how political parties operate and who have experience within parties.

Mr. Clive Betts (Sheffield, Attercliffe) (Lab): Does my right hon. Friend agree that the spending of tens and tens of thousands of pounds in individual constituencies for the sole purpose of electing a single candidate is a real threat to a democracy and little more than an attempt to buy votes and seats? Will he therefore give his support to Sir Hayden Phillips’ recommendation for continuous spending limits at a local as well as a national level and work with the Opposition parties to try to find a way of making sure that the limits are both practical and enforceable?

Mr. Straw: I do agree with my hon. Friend and Sir Hayden Phillips’s report provides a way through, taking account, as I have said, of the fact that, inevitably, more money is going to be spent in marginal seats—but it need not be ridiculous sums more.

John Mann (Bassetlaw) (Lab): Next Tuesday there is yet another dinner of the United and Cecil club expressly to raise money for Tory marginal seats. Does my right hon. Friend agree that the names of the donors at those dinners, which are not on the public record, should be made transparent and put on the public record?

Mr. Straw: Yes, I do. Some £105,000 has been raised in the last two years. That is in addition to the £1.4 million that has been raised by the Midlands Industrial Council.

Mr. Kevan Jones (North Durham) (Lab): Does my right hon. Friend agree with me, and with my hon. Friend the Member for Bassetlaw (John Mann), that there should be full transparency of donations? That includes fundraising front organisations, such as Conservative patrons clubs and the United and Cecil clubs. There should be a legal obligation on those organisations to publish accounts of who gives them money and who attends the fund-raising dinners they hold in this place.

Mr. Straw: Yes, I do. [ Interruption. ] The right hon. Member for Maidenhead is chuntering about this. She is ever anxious to impose further regulation on the trade union movement—it has been the subject of a century of further regulation by the Conservative party—but not to examine the problems in her party and the lack of transparency that has always been a feature of Conservative party funding.

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