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4 Dec 2007 : Column 727

Ms Butler: Does my hon. Friend think that the spirit of the law allows political parties to accept money from someone described by a judge as showing “deliberate and pointed” dishonesty?

Tony Lloyd: We have to look at the spirit of the law is. The Labour party is entirely in the wrong place at present and we have no excuses, but I hope that all parties will look at the spirit of the law.

I want to make two points. Today, the Conservatives were questioned about the role of Lord Ashcroft and whether he is a tax exile. They refused to answer those questions and Lord Ashcroft has made it clear that he will not answer them either. That completely contradicts the spirit of clean politics that the right hon. Member for Horsham (Mr. Maude) spoke about earlier. He told my hon. Friend the Member for Ealing, North (Stephen Pound) that questions about the origins of money from the Midlands Industrial Council had already been answered. That is not true and the right hon. Gentleman either knows it or should know it, because the MIC secretary, David Wall, announced that the names of new MIC donors would not be revealed. He said:

That is a clear statement, so I invite the right hon. Member for Horsham to confirm that from now on, in the spirit of openness, the Conservative party will make it absolutely clear who funds the MIC and bodies such as Scottish business groups, Focus on Scotland, the Carlton club political committee, Fresh Start and many others. We know that over the last few years, the Midlands Industrial Council has given some £2.8 million either to the Conservative party directly or to Conservative support organisations.

Stephen Pound: Will my hon. Friend give way?

Tony Lloyd: I will not, if my hon. Friend will forgive me.

If we are talking about openness and transparency, I invite the right hon. Member for Horsham to make sure that he operates on the same transparent basis as he asks of the rest us.

I want to put a slightly different hat on and talk about the role of the trade unions. The Conservative party would love to turn the debate on to that subject. Let me say this, without any fear of contradiction: the money coming from the trade unions into the Labour party is the most scrutinised money in British politics. The money given to my party and the one or two other parties that benefit from trade union moneys is so regulated that every pound is properly traceable. I say to Opposition Members that not only has that money not at any stage been challenged by the Electoral Commission or the certification officer, but the Neill inquiry said that it was satisfied with the way in which matters were handled. It is important that we establish that.

Mr. MacNeil: Will the hon. Gentleman give way?

Tony Lloyd: I will not, if the hon. Gentleman will forgive me.

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In this country, we have a democratic trade union movement—one that even Opposition Members should be proud of. Our trade unions are not like the fixed trade unions in other countries. The trade unions have never run away from the idea of modernising their relationship with the Labour party. They are making it quite clear even now—when the leader of my party spoke at the weekend—that the relationship will be modernised.

There will be discussions within the ambit of the labour movement on a basis that will make it absolutely clear to trade union members where their money goes. In the end, it is accountability to members, and transparency, that matter. If my party had had that level of transparency with respect to private donors, none of us would be facing the allegations and charges that we face today. In that context, I am very proud of the trade union movement. I am proud of its link with the Labour party—a link that we do not intend to break. It is important that the Labour party continues to maintain links with the trade unions. That is an important part of Labour’s democracy and the democracy of this country.

I make the following challenge to Conservative Members. The trade union movement has always offered to work with the spirit of the times and in the national interest. Will they ask Lord Ashcroft to do the same? Will they ask him to make it clear where his money comes from and whether he is prepared not to treat the Conservative party as a wholly owned subsidiary of Ashcroft enterprises—one that he has completely bought? Frankly, that is the only explanation for the Conservative party—under orders from its paymaster—turning away from the Hayden Phillips process.

Mr. Maude: Will the hon. Gentleman accept that the amount of money that Lord Ashcroft gives through his companies to the Conservative party is considerably less than that given by either Lord Sainsbury, who after all became a Minister in the Labour Government after being a major donor, or Mr. Mittal? The hon. Gentleman may recollect that there was outstanding a very substantial loan from one of Lord Ashcroft’s companies to the Conservative party, which got repaid in full with interest.

Tony Lloyd: I would accept an awful lot more from the right hon. Gentleman if he would get Lord Ashcroft to make it quite clear where his money comes from and whether he pays tax on it in this country. That is the real challenge. Is the Tory party prepared to wean itself off the Ashcroft moneys and clean up its own house? In the end, that is the measure that the British public will judge the Conservative party on—not whether we can have an agreement across the different parties on a cleaner political system, but whether that agreement will operate only between the Liberal Democrat party and the Labour party, leaving the Conservative party once again on the sidelines, facing the allegation that it does not want to clean up British politics.

Several hon. Members rose

Mr. Deputy Speaker (Sir Michael Lord): Order. I am sure that the House is aware of the fact that the 10-minute rule on Back-Bench speeches applies from now on.

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6.4 pm

Mr. Andrew Tyrie (Chichester) (Con): The answer to the question from the hon. Member for Manchester, Central (Tony Lloyd) is that we certainly will be prepared to wean ourselves off the Ashcroft money if the Labour party is prepared to engage in meaningful trade union reform. Unfortunately, we have not seen that from Labour so far.

The occasion for this debate is another massive scandal about the way in which Labour has been funding itself over the past 10 years, but the real reason we are here goes much deeper and concerns both parties. We are here because a large proportion of the electorate believes that donations to political parties buy influence, access and honours—and, frankly, the public may be right. That is the canker at the heart of our otherwise largely uncorrupt system. I have never believed that the honours awarded in the 1980s were wholly unrelated to party donations, but since 1997 things have got much worse. It has not just been cash for honours. We have had Ecclestone, Mittal, PowderJect, Enron—the list goes on and on.

Mr. Straw: Enron?

Mr. Tyrie: The Labour party received £36,000 from Enron. The Secretary of State seems to have forgotten about that. I notice that he did not challenge the reference to PowderJect and all the others, either.

There is only one solution to the problem of large donations: to impose a cap on them. That cap has to be comprehensive and binding on trade unions—which wield enormous influence—companies and individuals, including Michael Ashcroft. The leader of my party, to his great credit, has recognised that and has been prepared to propose bold reforms. The reason we are here today, and the reason we have not got a settlement, is that so far the Labour party has not been prepared to come with us.

Under the current Prime Minister, we have not seen any evidence of real commitment to reform. Perhaps I should contrast that with what happened when I was initially involved in the negotiations two years ago. Then, it was quite clear that Tony Blair was prepared to undertake fundamental reform. He knew how dangerous it was for Labour to become too dependent on the unions for cash. That is probably why he got Lord Levy in at the beginning, more than a decade ago, to find some big donors to counterbalance union influence. It may have ended in tears, but it worked for Tony Blair for a time. He always knew that if he had to do without the unions, he could, and the union bosses knew that too.

It is so sad that we have had no substantive response to the scandal from the current Prime Minister. His statement on Saturday was completely substance-free. It was little more than an effort to deflect attention from what was going on in his party. In some ways, it was worse than that, because he distorted the truth. He alleged that Hayden Phillips had recommended local spending limits when he had done nothing of the sort.

Mr. Deputy Speaker: Order. I am not happy with “distorted the truth”. Perhaps the hon. Gentleman would like to use a different phrase.

Mr. Tyrie: Are you happy with “misled the people of this country”?

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Mr. Deputy Speaker: Certainly not. I would be very grateful if the hon. Gentleman chose a phrase that is suitable.

Mr. Tyrie: I used that phrase only because it happens to be the one that the Prime Minister used, and that was not ruled out of order, at the Dispatch Box a few weeks ago—

Mr. Deputy Speaker: Order. My concern is the words that are used in this debate.

Mr. Tyrie: I think that we can say that those listening to the Prime Minister might have found it difficult to work out exactly what he was proposing.

Mr. Straw: May I say to the hon. Gentleman, in rather more temperate language, that what he is claiming is simply incorrect? Paragraph B3 of the draft agreement from Hayden Phillips states:

Of course there is an issue about the discretion that will be exercised, but it is quite clear that Hayden Phillips has it in mind that local spending would be covered.

Mr. Tyrie: The right hon. Gentleman knows very well that it is up to each party to decide how to allocate spending locally, within the overall envelope. He also knows that he mentioned only one of a number of proposals made by Hayden Phillips. We want to put those other proposals in the public domain, but the right hon. Gentleman has flatly refused to allow us to publish them. All he has to do is tell Hayden Phillips that he would like to see them in the public domain; then the public could have a wider debate about all the other suggestions that have been put to us by him.

The right hon. Gentleman continues to contribute to the debate with views that any reasonable person might conclude appear to mislead. He repeated, mantra-like, the view that we started off with in the talks, together: that we were engaged in an arms race. He completely ignored the fact that during those discussions, comprehensive research was commissioned that shows the opposite to be the case. Hayden Phillips’s team produced a detailed, thorough research paper, which I am not allowed to show the House because the right hon. Gentleman will not allow me, showing that the arms race had been greatly exaggerated, yet he persists with that mantra.

Mr. Straw: Does the hon. Gentleman deny that the limit that should have applied to both main parties was £40 million, and that as Hayden Phillips recites in his report, £90 million was spent in the year before the last general election?

Mr. Tyrie: Does the right hon. Gentleman agree that the paper produced showed decisively that in real terms there had been scarcely any increase at all in overall spending by the major political parties? Indeed, the lion’s share of the increase that had been noted came from the Liberal party.

The main issue on which there has been obfuscation and denial is affiliation fees. They are not individual
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donations. How could they be? Some 55 per cent. of affiliated trade union members do not even vote Labour, never mind want to make a donation to the Labour party. The Labour party really has to make up its mind: either it wants affiliation fees to continue to be treated as a collective donation, in which case they will have to be subject to the £50,000 cap proposed in the negotiations, or they should be treated as individual donations, in which case individuals should be allowed to choose whether they give the money, and to which party. I note that the right hon. Gentleman is not prepared to get to his feet and respond to that point.

Another of the myths that we often hear is that breaking the financial link with the trade unions destroys the Labour party. That of course is complete nonsense. The head of Tony Blair’s policy unit, Matt Taylor, was refreshing in his honesty. He wrote:

that is, the relationship between the unions and the Labour party—

The New Democratic party, Labour’s sister party in Canada, went down the road of reform and realised that it was extremely beneficial for it, both electorally and as regards its ability to formulate policy. Indeed, when the Select Committee on Constitutional Affairs went to Canada, Labour Members on the Committee were surprised and impressed by the enthusiasm for imposing a cap on unions’ donations, and for breaking the financial link.

Ian Lucas: Will the hon. Gentleman give way?

Mr. Tyrie: If the hon. Gentleman will forgive me, I will not; I have already given way a number of times, and I want to make only one more short set of remarks on what is needed now. First, in the immediate future, it will be difficult to restart talks until Labour’s position is more stable. I am still reflecting on the fact that for a year I have been sitting opposite Labour negotiators, one of whom has admitted systematically breaking the very rules that we were trying to improve in the negotiations. In our talks, that same man supported stronger investigative powers for the Electoral Commission. There are to be inquiries by Lord Whitty and the police, and we need to wait until we know where those inquiries are taking us, and with whom we will be negotiating.

Secondly, we must keep focused on the real source of the problem. When Tony Blair wrote Hayden Phillips’s terms of references, he made that absolutely clear; the issue was about donations and transparency, not expenditure. The then Prime Minister was right. The crisis has been caused by the big donations culture over many years.

The ball is now in Labour’s court. It must know by now that it cannot secure a meaningful or lasting agreement from the House while it is in a state of denial about the need to reform the union link.

The plain fact is that right now Labour is financing itself with the donations of millions of people who do
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not even vote Labour, never mind decide to donate to it. That is morally unacceptable, and it has to stop. The current treatment of affiliation fees is a legacy from a bygone era. In the 21st century we should have gone beyond the age of corporatism and collectivism. We Conservative Members want to work with Labour to clean up that tawdry area of politics, but to do so, we need a counter-party. If Labour comes forward with serious proposals to give genuine individual choice to millions of affiliated members, the talks can resume immediately. I very much hope that after reflection, the Prime Minister will deliver what is required to get the talks going again.

6.16 pm

Mr. David Winnick (Walsall, North) (Lab): We have been asked to shorten our contributions. It will not come as a surprise to anyone in the House to hear that the debate has not helped us to advance towards a solution on party funding. No one expected that it would; Opposition day motions do not normally lead to a calm atmosphere. We are in the same position that we were in previously.

I intend to make what might be described as critical comments about contributions to my party, but first, as far as Lord Ashcroft is concerned, it would have been much better if we had clarified his tax status. It is simply impossible to believe that a person who bankrolls Tory candidates in marginal constituencies does not even pay tax in the United Kingdom. They will not say so in this debate, but privately a number of Conservative Members must have at least some reservations about the role that Lord Ashcroft plays, even more so if he does not pay income tax in the United Kingdom. As for the Liberal Democrats, it would have been far better for their party’s integrity if the £2.5 million had been returned, somehow or other. I was not altogether impressed by the excuse that was given.

When we hear about accusations such as those made today, at least we can say that no Member of Parliament is being accused of being paid for asking questions, and no money in brown envelopes is being passed around, so I suppose that, to some extent, we have made some progress. It should not be forgotten that the Committee on Standards in Public Life only came about as a result of the media’s exposure of what was going on in those days. Of course I accept that only a small minority of Conservative MPs was responsible, but their actions undoubtedly brought Parliament into disrepute. When the Committee was set up—it was known of course as the Nolan Committee, after its first chairman—John Major was clear that it would not be able to look into party funding; that was excluded. The present Government are to be congratulated on removing the bar on the Committee looking into party funding. Legislation was introduced and other reforms were carried out. Those reforms were absolutely essential, and many of us campaigned for them when we were in opposition.

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