Examination of Witness (Questions 40-47)
RT HON
JACK STRAW
MP
19 JUNE 2007
Q40 Chairman: I am not sure that
establishing the principles is quite as straightforward as you
suggest, given, for example, that there are some people who believe
very strongly that it is anachronistic for people to be making
contributions as members of trade unions to parties they do not
vote for. That is the position of the majority of members of trade
unions in the way that the system works at the moment. Other people
feel equally strongly that the ability of a party to attract fairly
large sums of money for expenditure over the whole cycle of Parliament,
much of which is outside any real control at all, is unacceptable.
Establishing a set of principles which brought together all of
these issues was a major task for the Committee, one where my
colleagues in different parties went to some lengths to reach
positions which were not always individually comfortable for them.
Mr Straw: I can understand that.
It is in the nature of negotiations, if they are going to be successful,
that you have to end up in a position which is different from
the place where you started. No negotiation would ever be successful
if people went into negotiations expecting the other party simply
to agree. That is not a negotiation. What you have to do in a
negotiation is to seek to understand the limits of the other party,
what they want from the negotiations and try to arrive by an iterative
process at a conclusion. It may not be one anyone round the table
had previously thought of, but arrive at a conclusion where everybody
round the table can justifiably say they have achieved a better
result by this agreement, even though they may have had to modify
their starting position, than we would have done if we had simply
been at the starting point. I do not have your report in front
of me but you established a number of principles, one of which
was, words to the effect, that no changes should take place which
gratuitously undermined the constitutional setup of existing political
parties and that is also an important principle.
Q41 Chairman: As someone who in party
political life has been quite a forthright defender of the position
of your own party whenever it is under attack over these matters,
you are a particularly eloquent defender of your own party's existing
system, you do realise that around this table at least we have
all had to accept that the odd sacred cow might have to be slaughtered
in the interests of getting public confidence.
Mr Straw: I have been a great
defender of the first-past-the-post system. I plead guilty to
that. I am in quite good company actually and there are people
in other parties who take the same view, so there we are. Far
from being a blind defender of the status quo of the Labour
Party, quite the reverse. I say modestly that it was I who first
proposed that Clause 4 should be changed in a pamphlet which I
published in early 1993 which did not find favour with the then
party leader; far from it. Of course, we all have to recognise
that the environment in which we work changes, but we have to
do that in a way in which you can take people with you and which
does not offend some rather key principles of democracy, which
is that within a very broad framework people and institutions
should be free to come together to form political movements.
Q42 David Howarth: I suppose our
concern as a committee is that after all the bargaining between
the parties we end up with a system that is justifiable in terms
of the principles which have been laid down; that the bargaining
does not take us so far away from the principles you could not
really justify them except as the only deal you can get. I suppose
we are worried that the two fundamental principles, which are
that donors should not be seen to be unduly influencing parties
and that elections, either nationally or locally, should not be
seen to be bought, that those two fundamental principles should
be maintained, not just going into negotiations, but also in judging
the negotiations when they are finished.
Mr Straw: I do not disagree about
that. I might add another, which picks up an earlier remark by
the Chairman, which is that although on one level the House of
Commons has the power to decide that parties should receive a
greater level of state funding than they do currently, to a reasonable
degree, at the moment all of us have a responsibility to ensure
that that is justifiable to the members of the public. We have
to do all that.
Q43 Bob Neill: In terms of being
prepared to look at ways which achieve that sort of balance but
equally meet a certain degree of transparency, I was interested,
coming back to Mr Howarth's point about avoiding big paymasters
and so on, in a situation which I discovered there is in France,
which you may be aware of as well. There, for example, donations
to political parties are regarded as being donations in support
of democracy and therefore broadly in terms of public good and
have a charitable status. I was rather surprised, I must say,
that they regard that as enhancing transparency. I spoke to the
campaign teams of both the principal contenders in the presidential
election and they said that a very considerable chunk of their
donations came from the small- and medium-sized donations and
they were not in fact dependent upon the big baron paymasters
because that sort of tax incentive was encouraging people to give.
Mr Straw: I know less about the
French system than you do, but we need to get to a state where
it is regarded as a public good for people to make contributions
towards political parties. I am not talking about huge donations
here, although let me say that of those who may have donated to
all three political parties represented round this table and provided
large donations most have done so largely out of a sense of duty
and support for the objectives of that party; they could easily
have spent the money on entirely personal, selfish purposes and
they have not done so. I do not think they should be denigrated
for a second for that, even if it is a very large donation. There
is a separate issue about whether any donations have been used
to buy favours. Despite the rumpus about it in our system, I think
our system is actually remarkably clean in that respect, although
no doubt there may be a case for strengthening it. I am certainly
entirely with you that to get across to people that in a sense
our democracy cannot operate without political parties—and
it cannot—that in the main it is better for political parties
to be paid for by their political supporters than it is by the
taxpayer, though the choice over that is pretty limited, would
be a good thing. There have been various suggestions for assisting
this. The Neill Committee proposed that there should be tax relief
on donations up to £200 I think—it may have been £500.
That did not find favour at the time when I was putting the Bill
through the House. The Power Commission proposed that when voters
voted they could trigger a donation from the taxpayer of £3
per head. I do not speak for the Government for a second on this
but I was nominally attracted to that. Everybody else tells me
it is unworkable from both sides but I am still attracted to it.
Then there are suggestions in Sir Hayden Phillips' report for
some sort of matched funding.
Q44 Chairman: We proposed to you
that there should be tax relief for small donations with a matched
funding scheme to cover non-taxpayers. Your response to it was
sceptical; you were not persuaded in your official response that
this combination was a necessary component but you said it was
open to further debate. Is it off the table or on the table?
Mr Straw: It is what it meant:
we are open to further debate and argument about it.
Q45 Chairman: Specifically, it was
indicating that it is actually desirable that people should, if
they choose, contribute to democracy on a small scale.
Mr Straw: Part of the debate is
about whether tax relief is the most effective way of doing this.
Inevitably, if you provide tax relief, it goes proportionately
to those who qualify, those who are better off. There is an issue
there which we have to work through. Let me say that I am completely
catholic on this but I agree we need to find a system which provides
greater encouragement to giving to political parties.
Q46 Chairman: Thank you very much
for that progress report on two matters. We may see you again
in this capacity, who knows? These are uncertain times.
Mr Straw: It is in the lap of
the gods.
Q47 Chairman: It was not the gods
I had in mind.
Mr Straw: I have a feeling that
responsibility for party funding is a life sentence from which
there is no known escape regardless of what I am doing.
Chairman: It has followed you in whatever
post you hold. Thank you very much indeed.
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