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4 Dec 2007 : Column 703

I have a simple question for the Justice Secretary. Can he really say to the House that he believes Peter Watt’s claim that he did not know that the practice was illegal? He must know as well as we do how hollow that claim must be.

Mr. Skinner: On knowing or not knowing, with hindsight can the right hon. Gentleman tell me why the Tory party did not know that Asil Nadir was a crook who stole £400,000 from shareholders? Why did the Tories not send the money back? Why did they take $1 million from a Chinese drug baron? They never sent that money back either. Who is on the moral high ground now?

Mr. Maude: We know that things are getting really difficult for the Labour party when the House’s ancient historian has to come to its rescue. That is ancient history.

The Justice Secretary was the Prime Minister’s campaign manager, so can he tell us what he knew about the attempted donation by Mrs. Kidd on behalf of Mr. Abrahams to the Prime Minister’s leadership campaign? The Justice Secretary was not ignorant of the law; as he often tells us, he took the 1999 Bill through the House so he knows very well what the law required. Will he tell us today what he knew about the Abrahams donation proffered through Mrs. Kidd? What conversations did he have with his fellow campaign manager, Chris Leslie, who having, as he put it, “torn up” the cheque, helpfully passed Mrs. Kidd’s details to the right hon. and learned Member for Camberwell and Peckham (Ms Harman), now deputy leader of the Labour party? It is to that hospital pass that I turn now.

The longer this saga goes on, the more unanswered questions arise. The right hon. and learned Lady’s husband is the treasurer of the Labour party. Her defence is that she took donations only from people her campaign knew personally or who were registered donors to the Labour party, so who at Labour headquarters did her campaign call to check Mrs. Kidd’s identity? How was it that Baroness Jay, on behalf of the Environment Secretary’s campaign, knew that Mrs. Kidd was not the true donor and that it was some kind of proxy donation? If both Peter Watt and Jon Mendelsohn knew—as they admit—that Mrs. Kidd was not a bona fide donor, anyone at Labour headquarters who was equipped to respond to such a check on Mrs. Kidd’s identity must surely have known that she was not the real donor.

I turn to the curious incident of the illegal donation—we now know for sure that it was—to the Scottish leadership campaign of Wendy Alexander, or, as we must now call her, the human shield. Here again, there are more and more unanswered questions. There was clearly an illegal donation. Mr. Gordon, who solicited the donation, said he thought it came from a UK company and was therefore permissible. It then emerged that the campaign knew that there was literally a question mark over the donation; it appears in a schedule of donations, with the word “permissible?”—with a question mark—attached to Mr. Green’s name. We read that the schedule apparently originated from Wendy Alexander’s husband’s computer.

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At first, Wendy Alexander said she did not know about the donation. That is not true. How do we know? Because it turned out that she had written a thank-you letter to Mr. Green, to thank him not for a donation from his company, but for his donation. If that were not enough, the letter seems to have been sent to his home address in Jersey, so it rather gives the game away. It is not for us to speculate about Wendy Alexander’s position, but we note that the message has gone from Downing street for her to stand at her post lest the fallout is even closer to Labour’s high command.

Clive Efford (Eltham) (Lab): Will the right hon. Gentleman give way?

Mr. Maude: I shall give way, and then I want to move on to the case for reform.

Clive Efford: I am impressed with the right hon. Gentleman’s assiduous attention to detail in naming donors. Will he answer a question for me? How is it that Coleshill manor, the campaign headquarters of the Conservative party, is funded by the Midlands Industrial Council? It is described by the right hon. Gentleman’s leader as an intricate part of the Tory party but it is registered with the Electoral Commission as a regulated donee—

Mr. Simon Burns (West Chelmsford) (Con): It says here.

Mr. Speaker: Order.

Clive Efford: Can the right hon. Member for Horsham (Mr. Maude) explain why there is such an intricate web of finance for that centre? Why is it not straightforward and easy for people to understand?

Mr. Maude: The hon. Gentleman is struggling a bit, as I think the House can appreciate. All those arrangements are registered with the Electoral Commission, which has been through them all and has approved them. There is only one party here that has admitted breaking the law, and that is his party.

I turn to the discussions that have taken place over the last 18 months under the chairmanship of Sir Hayden Phillips. These followed discussions between Tony Blair and my right hon. Friend the Member for Witney (Mr. Cameron) in March and April last year, in the aftermath of the revelations about loans. We have consistently argued for comprehensive reform that would deal finally with the perception that large donors have undue influence on political parties. I have to say that Tony Blair seemed to share that view.

Dealing with that perception requires, above all, a cap on donations. Everybody now agrees that a cap of £50,000 would accomplish that. But there is an important point here: the cap has to apply to all donations, from whatever source—whether individuals, companies or trade unions. Sadly, it has gradually become clear that Labour simply could not agree to genuine reform. As Tony Blair’s authority ebbed away and as he finally departed the scene, it became clear that Labour is so deeply in hock to the trade unions that it would not be allowed to accept even minimal reform.

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Barry Gardiner (Brent, North) (Lab) rose—

Mr. Maude: I will give way in a moment.

The key to this is trade union affiliation fees. I want to set this out very clearly. It is not straightforward territory and it is important that it is properly understood. Trade union affiliation fees currently funnel £8 million to Labour. We are invited to agree that those fees should escape the cap on donations because, it is claimed, they are individual donations. [ Interruption. ] I see Labour Members nodding sagely and thoughtfully, but that claim is about as far from the truth as it can be.

Trade union law requires a union member to be able to opt out of paying the political levy, but in most unions it is incredibly difficult to opt out and members are not told of their rights. [ Interruption. ] If hon. Members will contain themselves and remain patient, I will disclose the evidence for that. If union members do happen to find out that they have that right, they have to be quite extraordinarily tenacious to exercise it. Of 17 trade unions that have online application forms, only three mention the right to opt out of the political levy. It is true that a small minority of union members—

Anne Snelgrove (South Swindon) (Lab): Will the right hon. Gentleman give way?

Mr. Maude: I want to finish this passage, if the hon. Lady will forgive me.

A small minority of union members have succeeded in opting out of the levy, but polling has consistently shown that fewer than half of trade union members vote Labour. More than half vote for parties other than Labour. It beggars belief that those people are cheerfully making a voluntary contribution to a party that they do not even vote for. Indeed, it emerged during our discussions that a Liberal Democrat MP was surprised to find in the post a ballot paper for Labour’s deputy leadership election. [ Interruption. ] We do not know who that hon. Member voted for. Completely unknowingly, an MP elected for a different political party had become a member of the Labour party as a result of the supposedly voluntary donation.

It does not end there. In most unions, if someone does succeed in opting out of the political levy, they do not even get any money back. Their union subscription remains completely unchanged. The truth is that in most cases—not all—the money given to Labour under the guise of affiliation fees is entirely in the hands of the trade union barons. After all, it is the trade union leaders who decide how many affiliated members they are going to declare. Let us look at the numbers. Unison is one of the unions that does put the right to opt out up front on the application form. More than half its members have exercised that right and decided to opt out. Other unions, such as the Union of Shop, Distributive and Allied Workers, and the National Association of Colliery Overmen, Deputies and Shotfirers, declare that 100 per cent. of their members pay the levy, with no opt-outs whatever.

Even that is not enough for two of the biggest beasts among Labour’s paymasters. Amicus and the Communication Workers Union both calmly state that more than 100 per cent. of their members pay the
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political levy. I am grateful to my hon. Friend the Member for Huntingdon (Mr. Djanogly) for his research on the subject. Amicus shows that 109.4 per cent. of its members pay the political levy, and the CWU declares that 104.1 per cent. of its members do; I am sure that that would not have happened in the Health Secretary’s time at that union. That shows what a sham the situation is. We are expected to allow what are plainly block donations by the trade unions to be treated as individual voluntary donations. It is laughable.

As the discussions drew on, it became increasingly clear that Labour was simply not committed to delivering, or able to deliver, on Tony Blair’s promise of comprehensive reform. We went the last mile in an attempt to secure agreement. Eventually, it emerged that Labour was intransigent, even on the most basic of changes. We suggested that the right to choose whether to pay the levy should appear on the membership application form. We thought that that was completely uncontroversial and would go through on the nod. The law requires a right to opt out; and what could be more simple, straightforward and obvious than putting a little tick-box on the application form, so that one can make that choice when filling it in? We put that proposal forward—uncontroversially, we thought—and the answer was no. The proposal was unceremoniously rejected. There was no argument about it and no explanation of why it was turned down—just a flat, straightforward no. That tawdry story need not be the end of reform. We would rejoin the discussions tomorrow if the Prime Minister showed that he was serious about real reform, but so far he has not done so.

Tom Levitt (High Peak) (Lab) rose—

Mr. Maude: I am drawing my remarks to a close.

Nothing that the Prime Minister said last weekend changed that one iota. If union members had a clear, accessible choice of whether to pay the political levy, and a choice of which party should benefit from that political levy, it could be said with a straight face that the money was genuine individual donations, although even that would leave the unions in a uniquely privileged position. Any renewed discussions need to focus on donations, not on spending limits. All the scandals that have disfigured party funding have arisen from giving to parties, not from parties spending.

Before people start talking about the arms race, let us deal with that issue. The Hayden Phillips team made a study of spending trends over the past 15 years. It showed that my party spent less in the last election than we did, in real terms, in 1992. It showed that the bulk of the increase in spending by the major parties in recent years is accounted for by big increases in what the Liberal Democrats spend.

Anne Snelgrove: Will the right hon. Gentleman give way?

Mr. Maude: No, I am drawing my remarks to a close.

In his speech at the weekend, the Prime Minister claimed, no doubt inadvertently, that Sir Hayden Phillips had recommended local spending controls. He said that Sir Hayden

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That was simply not correct. In the draft agreement that Sir Hayden circulated, which is now in the public domain, Sir Hayden said:

I am sure that it was inadvertent, but I am afraid that what the Prime Minister said at the weekend was simply not the case; it did not accurately reflect what was said. How monstrous it would be if, at a time when the amount that sitting MPs can spend promoting themselves in their constituencies out of taxpayers’ money has increased so much, their competitors would be barred by law from spending money that they themselves had raised from private supporters. I know that Labour MPs and Lib Dems are feeling a little vulnerable at present, but even they must see how indefensible such a move would be.

There must be not a penny more of additional state funding for parties without comprehensive reform that addresses the concerns that the public have about party funding. This has been a sorry tale of lawbreaking at the highest levels by one of Britain’s major parties. For the second time in two years, the police are investigating a Labour Prime Minister. I hope the Minister will provide some genuine answers and will also provide the public with some hope that long-term comprehensive reform can eventually be delivered. Given the way that his Government have stumbled from incompetence to chaos to lawbreaking, we may have to wait some time.

4.51 pm

The Secretary of State for Justice and Lord Chancellor (Mr. Jack Straw): I beg to move, To leave out from “House” to the end of the Question, and to add instead thereof:

the Conservatives—

Let me begin with a proposition that, I hope, receives the approbation of Members on both sides of the House. In any modern society a well functioning democracy depends critically on the vibrancy of its political parties. It is the parties that are able to offer clear choices to the electorate. In turn, the activities of those political parties have to be paid for. Democracy does not come free.

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Until the last quarter of the 19th century, British politics was famously corrupt, but the introduction of the secret ballot and then of funding limits led to a rapid change in the activities of parties and to the conduct of elections—a change that has been sustained to the present day. Yes, there have been some well publicised problems, and in some cases, as we have heard, breaches of the law, which have occurred over the past 15 years and, by turn, have affected all the main parties and whose impact I do not seek to minimise.

However, in comparison with our own history and with many comparable countries today, our party politics is clean, there is a remarkable absence of corruption, and almost everyone who gives to a political party, whether in large amounts or small, does so not to gain undue favour, but because they are committed to the principles of that party and regard it as their civic duty to support it. But it is right, too, that when issues have arisen, the House has sought to deal with them and, whenever possible, to do so on a consensual basis.

Mr. Angus MacNeil (Na h-Eileanan an Iar) (SNP): I am grateful to the right hon. Gentleman. Last week, when the Prime Minister said that unlawful activities had taken place, he said that the money would be returned. Has the £650,000 left Labour party accounts, and where is it now?

Mr. Straw: I cannot answer that question; I do not know is the answer.

Mr. Andrew Mackay (Bracknell) (Con): Perhaps I can ask a question that the Secretary of State can answer. He piloted the 1999 Bill so will he tell us in what circumstances an illegal donation to a political party is not sent back to the donor, but forfeited to the Electoral Commission?

Mr. Straw: We have made it very clear that the donation will be sent back, and the law is very clear. May I just say this? A number of questions have been raised by the right hon. Member for Horsham (Mr. Maude), and will no doubt be raised by others, in respect of what is unacceptable and plainly unlawful, as my right hon. Friend the Prime Minister has said. The right hon. Gentleman mentioned internal party inquiries, and that is quite right, but he omitted to mention that there is currently an inquiry by the Electoral Commission and also by the police. It would be improper for me to seek to answer questions that should properly be a matter for the police and for the Electoral Commission.

Chris Ruane (Vale of Clwyd) (Lab): Does my right hon. Friend know what the following have in common: Tanbridge, the East Surrey Business Club, the Midlands Industrial Council, which is an unincorporated association, Westminster Circle, Conway Patrons Club, the 66 Club, the Ladies Luncheon Club, Marginal Magic and the Chelwood Club? Here is a clue—

Mr. Speaker: Order. That is enough for the Secretary of State to be getting on with.

Mr. Straw: I suspect that they have something to do with the Conservative party.

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