Examination of Witnesses (Questions 220-229)
SAM YOUNGER
AND PETER
WARDLE
16 MAY 2006
Q220 Mr Khabra: Why do you think
the large donations from wealthy individuals have become such
an important part of party fund-raising?
Sam Younger: It is interesting
perhaps to look at the work we did around the report that we published
in 2004. While it was the case, as we have already mentioned,
that the level of debate among the public has not perhaps yet
been taken as far as it needs to be to establish whether the public
would like party funding principles to emerge, although the public
were not terribly comfortable with more state funding they were
pretty clear that once individual donations, whether from individual
people or individual organisations, got beyond a certain level—no
real definition but big donations—they started to lose some
faith in the process. Why has it happened? It has happened partly
because of the decline in mass membership of political parties.
It has happened partly also, I think, because in different parts
of the world where there has not been a significant framework
of state funding, as membership and membership contributions drop
away and the cost of campaigning actually, or in parties' perception
(the arms race point), gets more and more expensive, they have
to fill the gap. That is my analysis of why we have reached the
position we are in at the moment.
Mr Khabra: The large charity organisations
get money from rich people, those who give money honestly for
a purpose. If these people can donate to a charity why can they
not do exactly the same by donating money to a political party
of their choice?
The Committee suspended from 5.29 pm to
5.45 pm for a division in the House
Chairman: We will now resume. I know
you were in the middle of answering a question from Mr Khabra
who is not here at the moment, but I intend to call the next group
of witnesses at six o'clock, which means we have to deal with
a number of things quite quickly in the remaining 15 minutes and
I will ask Mr Brokenshire to proceed.
Q221 James Brokenshire: I just want
to move on to a linked issue on donations and the potential risk
of at least the perception of a conflict of interest if a party
donates or loans money to a particular party and that party is
then in government and that person or a company connected with
him or her is then the beneficiary of a contract from that governing
party or makes a bid for a contract. Do you accept that there
is this conflict of interest and, if so, is there a need for greater
transparency?
Peter Wardle: I think transparency
is at the heart of this. The basic framework that was introduced
by the legislation takes as its starting point maximum transparency
about who is giving money to political parties and indeed how
political parties are spending the money they get. I think provided
the transparency is full and open it is perfectly possible for
any issues of conflict to be seen and raised. I do not think the
problem is necessarily with the rules on transparency of donations.
There may be an issue with the presence or absence of rules around
the awarding of contracts or other things that happen in government,
but that probably goes outside the scope of the legislation on
party financing, though not necessarily. It seems to me that if
there is a broken part of the framework it is probably at that
end at the moment rather than the basic principle of transparency
which is in PPERA about who gives money to whom.
Q222 James Brokenshire: So you would
not support in essence restrictions on people who have received
donations; there is more a need for greater transparency perhaps
when contracts are being bid for by persons connected with those
companies? Transparency at that end is something you think needs
a look at?
Peter Wardle: That would complete
the circle, if you like. It is impossible to have prospective
transparency. You do not know what may happen five years down
the track. The fact that the individual or the corporation may
have made a donation five years ago may or may not become relevant
when something happens later on.
Q223 James Brokenshire: But on the
basis of what you said is there a need for greater transparency
based on the system as it exists at the moment in relation to
contracts?
Peter Wardle: I cannot claim to
be an expert on the current rules. It seems to me that on the
whole commentators, the media, do not have too much difficulty,
perhaps as a result of freedom of information, in finding out
who gets government contracts, for example. I know there are issues
around who may have bid and been unsuccessful in government contracts,
but in terms of who gets the work there seems to be a reasonable
degree of transparency. It seems to me that if there is a problem
it is particularly at that end of the process.
Q224 James Brokenshire: Do you believe
that those who have substantial outstanding loans to political
parties should be appointed to ministerial office or is there
a need for greater transparency there as well?
Peter Wardle: The view we have
taken is that our job is to ensure maximum transparency. Political
parties, governments, individuals, may want to consider for themselves
how, given that transparency, various appointments, actions, behaviours,
statements, might be perceived. I do not think it is for the Electoral
Commission to get involved in commenting on those particular events.
Our job is to make sure that people who may have a view on those
events have the full information about any financial links with
political parties.
Q225 James Brokenshire: I hear what
you say about not wanting to tread on the toes of whether someone
should be appointed as a minister or not and that that as you
see it is not your remit. Is there a need, based on your feelings
as to where we are today, for any greater transparency on loans,
donations and in the context of ministerial office?
Peter Wardle: We have said already
that, to the extent that the public feel that there is not full
transparency around the financial links between individuals and
organisations on the one hand and political parties on the other
hand, public confidence is damaged. That in a nutshell is the
essence of the debate at the moment. We have striven since we
were established to ensure maximum transparency, and to the extent
we have not achieved that and the legislation has not achieved
that we have, as you know, called for a speedy solution to that
and we were pleased that that was put in place by Parliament in
the Electoral Administration Bill.
Q226 Mr Tyrie: Your role is advisory
so you are often on a hiding to nothing, frankly, but there are
a number of things it would be very helpful if you could do nonetheless
in the debate. The first is to establish some facts. You have
done some of that but, for example, I note in Sir Hayden's submission,
which we only got minutes before the beginning of this hearing,
that he appears to be swallowing the suggestion that Labour Party
funding comes from the trade unions amount to only 22%. Your own
figures suggest a range of 50-60%. I have never seen anybody suggest
it is less than half. I wonder whether in these controversial
areas you could try and put some facts into the public domain
in a digestible form to help the debate.
Sam Younger: In principle yes,
particularly if it is stuff that we have got already. I am very
wary of the treading on toes but more of what our own capacity
is in terms of generating particular information, but if it is
information we have got, particularly if there is a request, for
example, coming from this committee for information that is in
our possession, we will make every effort to put it together.
Q227 Chairman: We may want to put
in some more specific request for information of that kind.
Sam Younger: Yes, we would be
very happy to take that on board. There may be cases where we
cannot do it but we would say so.
Peter Wardle: It is also fair
to say that in the initial discussions we have had with the team
working for Sir Hayden we have pointed them to the fact that we
hold a lot of factual data about party funding as a result of
our remit and we would be more than happy to help them to find
their way through that.
Q228 Mr Tyrie: The point I was making
was that your data on the whole is not put necessarily into its
most digestible form; shall I put it like that? Try hunting around
on your own website and you will see what I mean.
Peter Wardle: I have tried that
on a number of occasions.
Q229 Mr Tyrie: Another example, although
you have put it into a more digestible form here, of research
that it would be helpful maybe to follow up, is the fact that
although it is true that we are faced with the apparent conundrum
that three-quarters of the population do not want state funding
and three-quarters of the population also think parties are up
to no good in the way they are funded, which is broadly what this
research says, it is also true that your same research suggests
most people do not distinguish between party funding and public
expenditure generally, nor state funding of parties and public
expenditure generally. Nor are people aware of the qualitative
research that you have done which suggests that once people have
some very elementary points explained to them in a relatively
neutral way they end up by a small majority supporting state funding.
Sam Younger: I think that is a
very good point. Indeed, that is part of why what we want to emphasise
is building on that deliberative and qualitative work and it is
part of the reason why also we would very much welcome any involvement
members of the committee would like to have in helping us collectively
get the most out of that process because I think there is a lot
in that qualitative work that can be built on in those terms,
but building up the knowledge base before you ask the public,
rather than just the knee-jerk question where in a sense I think
intuitively simply asking those two questions, to put it as you
did, "Are the parties up to no good?", and, "Do
you want your taxpayers' money to be used for parties?".
In a sense I think we know what answer we are going to get to
those as start questions but the issue is trying to get in behind
that and see what people say when they understand a little bit
more about it. That is certainly one of the elements we want to
pursue.
Chairman: Thank you very much indeed.
There are probably one or two other points we might follow up
in correspondence with you and we expect to see you before too
long in any case on a number of other matters, including the postal
voting issue and the governance issues which are also the subject
of other inquiries going on at the moment. Thank you very much
for your help this afternoon.
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