Examination of Witnesses (Questions 80-99)
RT HON
LORD FALCONER
OF THOROTON
AND ALEX
ALLAN
19 APRIL 2006
Q80 Chairman: Surely a key issue
is whether state funding goes into campaigning from which it is
specifically precluded at the moment whereas it is available for
policy development. It is not so much the quantum, it is whether
it moves into that area.
Lord Falconer of Thoroton: Dr
Whitehead has written a pamphlet in which he raises the issue
of if you start to try and categorise what the money is for, ie
you use it for that purpose and then you use the money you might
have used for that for other things, that might be regarded as
unacceptable. He also raises the issue about the extent to which
that gives rise to evasion, you trying to cram everything into
the category that the state is prepared to fund. There are difficult
issues about precisely what you fund from the state, but if the
political or policy purpose of the state funding is to avoid the
risk of a few donors then inevitably it must carry with it a cap.
Q81 Mr Khabra: That means that the
state funding, whatever the level is, may be more in one term
of election than another. Who is going to bear the costs? Is it
the taxpayer?
Lord Falconer of Thoroton: If
it was state funding it would have to be borne by the taxpayer,
yes.
Q82 Mr Khabra: That means that, with
the increase in the amount of funding available to a number of
political parties, it is going to be a huge amount and it is going
to be the taxpayer who will bear the cost.
Lord Falconer of Thoroton: Alex
Allan referred to the Electoral Commission's report in 2004 where
it asked if it was better that parties should be financed by their
own fundraising rather than being subsidised by the taxpayer and
76% think they should raise their own money and not be funded
by the taxpayer. It also says that funding parties by voluntary
donations is unfair because there is a risk that wealthy individuals,
businesses and trade unions can buy influence over parties, and
70% agree with that as well. The public are, quite understandably,
very worried about the taxpayer funding political parties and
they are very worried about rich people capturing from political
parties and there seems to be an equal level of worry about that.
Alex Allan: For example, when
people were asked how parties should be funded and so were given
a choice of options, 37% said totally by voluntary donations with
no funding from taxpayers and 43% said by some proportion of taxes
and voluntary contributions. There are obviously a range of views
amongst the public.
Q83 Mr Tyrie: The thing that you
have just read out said 76% of people do not want state funding,
but if you look at the questions that were then asked of that
76%, you will find that they do not distinguish between the funding
of politics generally and party funding. In other words, their
knowledge of the area is pretty hazy, which is why the consultation
point that Dr Whitehead made earlier is very important.
Lord Falconer of Thoroton: It
does not surprise one that people would say I do not want to spend
taxpayers' money on political parties. It does not surprise one
that they would say I do not want political parties to fall into
the hands of a few high value donors.
Q84 Mr Tyrie: Talking about a few
high value donors, presumably if we put a cap on that that is
going to include trade unions.
Lord Falconer of Thoroton: The
trade unions are part of the foundation of the Labour Party. They
are an organisations that are affiliated to the Labour Party.
There needs to be a consideration by Sir Hayden Phillips of what
their relationship in donation terms is to the Labour Party.
Q85 Mr Tyrie: Do you really mean
that we are going to have to rely on Sir Hayden Phillips to work
out how we are going to disentangle the relationship between the
trade unions and the Labour Party and then the Labour Party is
going to say, "That was a good idea. We'll go ahead with
that"? Is that really a serious way of going about this issue?
Lord Falconer of Thoroton: I think
it is a very serious way of going about it.
Q86 Mr Tyrie: I think it will be
met with laughter by those who are watching this issue, Lord Chancellor.
What we need is the Labour Party's considered proposals. You say
they are going to come forward in a month, but it is not going
to include serious consideration of this issue, that is what you
have just been saying.
Lord Falconer of Thoroton: There
needs to be a serious debate about how you deal with the small
numbers of people who make significant donations. You will see
from the figures that I gave that the amount that the trade unions
now finance the Labour Party is about 26% having come down from
a very much higher figure. Sir Hayden Phillips needs to look at
all of those issues and reach a conclusion. I am not going to
put forward a solution now in relation to that, but I have indicated
where the public's concerns are in relation to that.
Q87 Mr Tyrie: The Labour Party's
figure of 26% is hotly disputed by independent commentators, who
put it at around half. Only the Labour Party puts it at 26%. Do
you not think that this issue of the relationship with the trade
unions goes to the heart of whether we are going fundamentally
to reform donations and the party financing structure in the UK
and that if that fundamental issue is not addressed then, frankly,
we are not going to move forward? You are one of the few unelected
senior ministers who do not rely on trade union funding to be
here and to answer questions and so one might hope that you would
be just a tad more independent than the rest of your Party in
answering this question.
Lord Falconer of Thoroton: I have
indicated in relation to all of these areas that there needs to
be a solution that carries public confidence. The way that you
get public confidence is by all the parties putting forward their
views, Sir Hayden Phillips coming to a view and hopefully an agreed
solution coming forward, one that will embrace the trade unions
as well.
Q88 Jessica Morden: I want to move
on and ask about how you think things operate at a constituency
level. Do you think the existing reporting requirements for donations
and accounts are becoming too onerous on your average volunteer
party treasurers, and do you not think this might lead to fundraising
locally being more difficult and more reliance on your national
machine situation?
Lord Falconer of Thoroton: I think
the detail of what has got to be disclosed in terms of the constituency
obligation is pretty complicated. It is perfectly plain from speaking
to people over a long period of time that there are very legitimate
legal uncertainties which are often not resolved by guidance that
is intended to be helpful but does not cover a whole range of
difficult issues, and there are lots of people who spend a lot
of time during and after elections trying to work out precisely
what they have got to disclose. I fear that it is one of those
things where it is quite difficult to put the genie back in the
bottle. The idea that you can go to a situation now where there
is less disclosure in relation to what went on at constituency
level does not look to me to be realistic in the context of the
times. It may well be that one could try and think of a way that
one could simplify it, but to simplify it in a way that would
involve less disclosure does not seem to me to be practical.
Q89 Jessica Morden: Do you not think
it makes fundraising by local parties more difficult to do and
puts more reliance on your national party?
Lord Falconer of Thoroton: It
does not make fundraising in the sense of local dinners and local
events more difficult. It makes people tremendously windy about
the extent to which, for example, they allow people to lend their
car in relation to local activity in a constituency. The underlying
point about how do you try and encourage more activity locally
is very, very important and I do not know what the answer to that
is.
Q90 Mr Tyrie: We all know that the
real reason we are here, of course, is that there has been very,
very widespread public concern about loans to political parties
and the impression that undue influence can be bought and has
been bought and that there may have been an exchange of favours
or honours for cash. That is the subject of a police investigation
and I am not going to stray into the territory that they may want
to cover. How bad do you think it is? You have talked about the
issue of public confidence and the need to restore it and maintain
it. How bad is this crisis?
Lord Falconer of Thoroton: I would
not describe it as a crisis. I think people are concerned about
it. It is something that is very, very widely discussed in the
media. On the extent to which it is an issue more widely amongst
the public, I do not know, but it is plainly something that needs
to be addressed.
Q91 Mr Tyrie: Do you not think that
in the back of their minds the public have the sorts of things
that Labour were saying nine years ago about how "We will
clean up politics. Have trust in us and we will repay that trust.
Our mission in politics is to rebuild the bond of trust between
Government and the people"?
Lord Falconer of Thoroton: I think
all of us engaged in politics are very keen to ensure that there
is a proper bond of trust between the politicians and those that
they serve. A lack of connection between the politicians and those
that they serve does none of the politicians any good at all.
My own experience is that the vast majority of politicians are
genuinely extremely keen to ensure there is that proper bond of
trust. That is why my experience in response to the current issues
is that most politicians are extremely keen to try to do what
can be done to improve the situation.
Q92 Mr Tyrie: One of the proposals
that the Government inherited from Lord Nolan was that there should
be fundamental reform of the legislation against corruption. The
existing legislation dates back to 1916 which was when Lloyd George
was Prime Minister, much around the time of the Honours Act.
Lord Falconer of Thoroton: Asquith
was Prime Minister in 1916.
Q93 Mr Tyrie: Lloyd George took over
during 1916 after the failure of one of the terrible offensives
on the Western Front. Why has the Government decided to shelve
the Corruption Bill?
Lord Falconer of Thoroton: The
1916 Corruption Bill, although it is quite archaic in its language,
covers most problems in relation to corruption. If they are not
covered by the 1916 Act then the common law fills in. I do not
think for one moment the problem of corruption is uncovered by
the criminal law. As far as honours is concerned, and you will
have read it, the Honours Prevention of Abuses Act 1925 is in
very wide terms.
Q94 Mr Tyrie: There was common agreement
at the time in 1997 that something needed to be done about it,
legislation needed reform and modernisation. Are you saying that
the Government has now decided that it does not need reform and
it is perfectly all right as it is?
Lord Falconer of Thoroton: It
would be a good thing if there was reform. I do not think there
is a point to be made about the absence of criminal law in relation
to corruption.
Q95 Mr Tyrie: I find that quite extraordinary.
The Joint Committee that looked at this deeply regretted that
the Government had decided not to go ahead with putting a clause
on the statute book that made it a statutory offence to misuse
public office.
Lord Falconer of Thoroton: Again,
I am not quite sure what particular sorts of sets of facts you
think are not covered by the criminal law at the moment.
Q96 Mr Tyrie: I do not need to answer
the question, I am afraid that is your job here. I find it astonishing
that the Government should have decided to sweep aside that recommendation,
a recommendation which originates with Nolan. Are you suggesting
that you are not going to look again at this issue at all?
Lord Falconer of Thoroton: I have
made it clear what my answer to that is, Mr Tyrie, which is that
I do not believe there are any sets of facts which the current
criminal law does not cover. It would be most desirable that the
Corruption Bill or Acts should be made more modern in their language
but there is not a problem about criminal situations not being
covered by Acts of Parliament.
Q97 Mr Tyrie: Could I ask a number
of detailed questions about your understanding of the Honours
Act, another piece of legislation that was put on the statute
book at around the same time. For example, can you give the public
an assurance that the Attorney General will not interfere in any
way with the conclusions of the DPP and that the DPP would be
permitted, were there to be something brought to him, to take
any decisions for prosecution wholly independent of the Attorney
General?
Lord Falconer of Thoroton: Of
course. It is a matter for the DPP and the Crown Prosecution Service
to make decisions in relation to this in the normal way and, of
course, the Attorney General would not interfere in the normal
course of decisions being made.
Q98 Mr Tyrie: I am glad you are able
to give that assurance. Do you know of any bar to the bringing
of a private prosecution under the Honours Act?
Lord Falconer of Thoroton: None
that I am aware of.
Q99 Mr Tyrie: In the event of a conviction
under that Act, or indeed any other serious criminal offence that
may have been perpetrated by a member of the legislature, and
I am thinking particularly of the Upper House, is it the Government's
view or intention that we should ask those who have had such honours
or achieved such positions to relinquish those honours or stand
down, in this case, from the House of Lords? At the moment we
have got a convicted perjurer who is permitted to assist in the
making of laws. I do not support that, I never did and I said
so publicly at the time. We may find ourselves with more such
characters in the future.
Lord Falconer of Thoroton: In
relation to the convicted perjurer, the position was that we indicated
in the proposal for Lords reform in 2002 or 2003, I cannot remember
which year it was, that where you were sentenced to a prison sentence
of 12 months or more you should have your peerage, and possibly
your other honours, taken away. That seemed a perfectly sensible
provision at the time. I am not going to speculate remotely on
what the consequences of any prosecutions may be.
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