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The fourth objection is one of simple equity. We in the House have cheerfully voted ourselves huge increases in the amount of taxpayers’ money we can spend on promoting our activities as incumbent MPs. There is a case for and against that, and we believe that the communications allowance is a step too far. None the less, at the same time as we expand the scope for taxpayer-funded publicity for MPs, it cannot be right
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for the governing party to try to limit what candidates who seek to unseat us can spend from money that they have raised privately. That is outrageous. We might expect it in Mugabe’s Zimbabwe, but in Britain it is simply unacceptable.

In conclusion, we cannot support this curate’s egg of a Bill. It is good to hear the Justice Secretary sounding rather more conciliatory today than he did in the summer, when he seemed more than usually keen to have the sun of his Back Benchers’ favour warming him—it would of course be wrong for us to speculate on why that might have been, but I am sure that there were the best of reasons. We stand ready to work with him and talk with him to find acceptable answers to the problems, as we have been throughout the process.

It is too late to achieve the long-awaited settlement of party funding that Sir Hayden Phillips worked so diligently with us to achieve. There will need to be another attempt to reach the consensus desirable for such an outcome, but it will have to wait for another day and another year. In the meantime, I commend our amendment to the House.

5.59 pm

Dr. Gavin Strang (Edinburgh, East) (Lab): I am grateful for this opportunity to say a few words in the debate. The speech by the right hon. Member for Horsham (Mr. Maude), which was an excellent statement of the Conservative party’s position, clearly reflected the failure of the two main parties to reach some sort of agreement on the main elements of what could have been a comprehensive package. Having listened to the interventions that have been made, I think that it might be possible to cobble together a majority, with Liberal support. It is undoubtedly right that we should have the objective of securing consensus. Indeed, I was one of a handful of Members of Parliament who gave evidence to the Committee on Standards in Public Life inquiry on the Electoral Commission, and that was one of the points that I made then. There is probably no one in the House who disagrees with the proposition that it would have been much better if it had been possible to achieve an overall agreement on the next stage.

I am proud of the Political Parties, Elections and Referendums Act 2000. Okay, there was an omission in relation to commercial loans, but I do not think that that was the result of collusion between the two major parties; people genuinely had not thought the matter through sufficiently. It is quite a remarkable omission, when one thinks of it, but no one from any of the Opposition parties raised the issue at the time, so legislation had to be introduced to deal with it. There is no doubt that we on the Labour Benches are entitled to be proud of the changes that have been made and the transparency that has been introduced. Obviously, my right hon. Friend the Justice Secretary played a major role in that, and the 2000 Act is the centrepiece of those changes.

The Committee on Standards in Public Life produced its report on the Electoral Commission in January 2007. I think that the proposed changes have broad support; that, as I understand it, is the Conservative party’s position, too. It makes sense to appoint some commissioners—obviously a minority—who have some sort of political background, not least for the reason
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that the right hon. Member for Horsham gave: there is a big distinction between an advisory committee and having people on the commission, where the decisions are taken, who have experience of politics. He seemed to suggest that those commissioners would be politicians or ex-politicians, but I assume that they would be drawn from a wider group than that; they might be people who had stood for Parliament, or for local government, or who had a track record as an election agent, or had been local chairmen of a political party. Someone who had been a fairly senior party organiser might be considered. I have no strong view on that, but I support the principle of incorporating people with some political experience directly in the commission.

The guts of the issue is the question of expenditure by political parties nationally and locally. I strongly support limits and controls. If we do not have them, we will go further and further towards the US system, in which colossal sums of money are involved. It so happens that this time around, perhaps unusually, the candidate one might expect me to support, Obama, will massively outspend the Republican candidate, but that is an aside. We should have effective limits and controls on expenditure; I think that that is accepted across the House. A lot of national expenditure is wasteful; one might consider some of the huge adverts deployed, usually by the major parties, in newspapers and billboards. Some of them—I include my party’s adverts, as well as those of the Conservative party—have done the parties no good whatever in my constituency.

Mr. Heath: The right hon. Gentleman is absolutely right about billboards and all the nonsense used by the political parties, but I want to mention one aspect of central party funding that causes me concern in constituencies during election periods. Letters are targeted at named constituents. They do not mention a party candidate, but do mention the party platform and leader. They are, in all aspects, a letter in support of the candidate, but do not mention the candidate’s name. That is completely outside the controls on election expenditure in a constituency. Does he agree that that needs to be addressed in the Bill?

Dr. Strang: Certainly, it would be a positive step to do so, according to the principle from which I argue. I am generally in favour of controls. The hon. Gentleman makes an interesting and significant point that I shall come on to in a second. In essence, in a first-past-the-post electoral system, if there are to be national controls, there must also be local controls. As we know, the reality is that there are certain seats—they might be Liberal-Conservative, or Labour-Conservative—where there is a second-placed candidate who is the clear challenger. Inevitably, any party that is able to organise large sums of money to spend will be tempted to channel that money towards what it deems to be key seats that it has to win if it is to become the biggest party, if not gain an overall majority, in the House of Commons. To come back to the hon. Gentleman’s point, it follows that if we are serious about controls on expenditure, they have to be local, as well as national.

I listened carefully to the point that the right hon. Member for Horsham—the Conservative party spokesman on the subject—made about the trigger. I must confess that I was not that aware of such problems in the past,
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although I well remember how careful we had to be as candidates. As I understand it, his prime concern really relates to the present situation; he feels that candidates may have incurred expenditure, and that it would be unfair if that expenditure were now deemed electoral expenditure. In a sense, his point is time-limited, in that it applies only to the next general election. It does not rule out the possibility of some sort of agreement.

Mr. Maude: The right hon. Gentleman is absolutely right. Going back to a system of triggering might not be the right long-term solution, but at least we could have a sensible conversation about it. What would be outrageous is to reintroduce that system in the manner proposed, and to change the rules, in the middle of the game. It is one thing to make the rules more permissive in the middle of the game, but very much another, from the point of view of equity, to reverse the process when candidates are already in play.

Dr. Strang: I am grateful to the right hon. Gentleman for confirming that point. Certainly, whatever the mechanism, there have to be effective controls on expenditure at constituency level. That should not exclude direct mailing of the type described by the hon. Member for Somerton and Frome (Mr. Heath).

I have mentioned the commission and expenditure; my third point is about trade unions. I was interested in the right hon. Member for Horsham’s reaction to my intervention. I believe—people might say, “You would, wouldn’t you?”—that my position in relation to the trade unions’ role in the Labour party pretty well reflects the historical relationship between the trade unions and the Labour party. I am supportive of it. The trade unions are now heavily regulated by legislation. Of course, we are talking about affiliated trade unions, which have to have regular ballots to affiliate. I have had views, in the past, on the position of non-affiliated trade unions, which are an important source of workers, and indeed one might consider trying to organise some money—I am particularly thinking of my party—voluntarily through those trade unions. On the affiliates, however, one has to accept that the Labour party is, in a sense, a federal party.

John Mann: Can my right hon. Friend cite another example, from anywhere in the world, of an organisation that has to have recurrent, full postal ballots of its members in order to donate to a political party? Is there another example of such so-called democracy anywhere else in the world?

Dr. Strang: The straight answer is that I am not quite sure, but I certainly agree with my hon. Friend’s general point, which is that we are talking about a highly regulated, transparent framework. If I was looking for an example, I would look to Australia, but I do not know enough about the situation there, although obviously the trade unions are involved with the Labour party there; no doubt they learned that from us. The point that I want to make is that although there are other affiliated organisations, such as the Co-operative party and the Socialist Environment and Resources Association, the main organisations affiliated to the Labour party are the trade unions. They are the large ones, the ones
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that have played a major role in the creation of the Labour party. I am very happy with that and I support it. It is fully democratic. You have to be a Labour party member of a trade union, obviously, to participate in our annual conferences. The examples that the right hon. Member for Horsham gave were errors. If it is true that a Liberal MP had some sort of communication sent to him because he was thought to be a member of the Labour party, that must have been an error.

John Hemming: Yes, I am the Liberal Democrat MP who got the ballot paper for the deputy leadership elections of the Labour party. The House will notice that it is not completed. To be fair to the Labour party, there is a box on it which requires one to state that one agrees with the Labour party before one sends the ballot paper in. That recognises that many people receiving it were not aware that they were affiliated to the Labour party, and I was one of them.

Dr. Strang: If you do not know enough about your trade union to know that it is affiliated to the Labour party, that is your problem, not the trade union’s problem. It is a remarkable reflection on your interest in these matters. I will give way again if the hon. Gentleman—I hope I do not misunderstand him—was not aware of the position of his own trade union.

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. May I make it clear to the right hon. Gentleman that whoever is involved in this matter, it is not me, as the term that he was using suggested?

John Hemming: I was indeed aware that the Musicians Union was affiliated to the Labour party. However, I was not aware that that included me as an individual. That is an important point, which the right hon. Member for Edinburgh, East (Dr. Strang) should recognise.

Dr. Strang: I am grateful, Mr. Deputy Speaker, for your guidance.

The hon. Member for Birmingham, Yardley (John Hemming) makes a valid point. I shall pick up another point, to be as fair and transparent as we can on these matters. The right hon. Member for Horsham referred to a greater number of union members being affiliated than were levy payers in the union. That did occur in the past. There is probably a substantial consensus in the trade union movement that unions should not affiliate to the Labour party on the basis of more members than they have.

Mr. Jonathan Djanogly (Huntingdon) (Con): Does the right hon. Gentleman believe that members of unions should be able to vote on where their money goes?

Dr. Strang: They do. I have just explained that there must be a ballot on affiliation, and of course every individual contribution is voluntary. People can easily contract out. I think the right hon. Member for Horsham was referring to the situation where some trade union members, through lethargy or a lack of knowledge, have not contracted out. Okay, that may occur.

Mr. Tyrie: The right hon. Gentleman said that it was a voluntary decision of each individual member to donate an affiliation fee. Can he say whether he believes
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that all 55 per cent. of trade union members who are affiliated, whom opinion polls have shown do not even support the Labour party but vote for other parties, are none the less dedicated as individuals to making sure that they make a donation every year to the Labour party?

Dr. Strang: The legislation is clear, as the hon. Gentleman says. There is a political levy. Members opt to pay the political levy and if their union is affiliated to the Labour party, one can be pretty sure that some of that money will go to support the Labour party’s return in the elections.

Mr. Heath: As the right hon. Gentleman knows, this is a matter that we discussed in the Hayden Phillips group. To his credit, the Lord Chancellor accepted the fact that there were anomalies whereby, as described, some unions, as an abuse—I can only think it is an abuse—affiliate more members than pay the political subscription, or pass over more money than they receive in affiliation fees. Given that that is the case, should the Bill not include restrictions on that, which is quite separate from any imagined abuses on the part of the Conservative party, which is its fig leaf for withdrawing from the all-party talks?

Dr. Strang: The hon. Gentleman can make that point and argue it. What we are discussing is an issue relating to the internal organisation of the Labour party. It is perfectly valid for Opposition Members to say that it has been a weakness in the Labour party’s relationship with the trade unions.

To pick up a point made by the right hon. Member for Horsham, when it comes to making a distinction between donations and affiliation fees, yes, as he rightly pointed out, one way of achieving that would be to treat affiliation fees as a sum made up of those individual donations. That is one way of doing it, but not the only way. It may be a clever and convenient way of resolving the difference between a donation and an affiliation fee, but for any long-standing trade union activist and member of the Labour party, those are different things. An affiliation fee is an annual payment by the trade union to the Labour party, based on the voluntary political levy. To effect that, the union must hold a ballot every so often. The other is a donation, which might come from a business, an individual or a trade union. That is how many of us in the Labour party see it.

Mr. Maude: I rather agree with the right hon. Gentleman. That is the way it works—affiliation fees are not in any realistic sense individual voluntary donations. The decision that is taken by the leadership of a trade union to give the money as a block to the Labour party, or to other parties, if the leadership chose to do so, should therefore be treated as a single donation. Our point is exactly that. If there is to be a comprehensive cap on donations, it should apply across the board. It should apply to businesses, trade unions and individuals in the same way. But if the intention is that affiliation fees should escape that, they must become what they manifestly are not at present—genuinely individual and voluntary donations.

Dr. Strang: That is the right hon. Gentleman’s view. He is jumping from the collective overall sum to the individual. I agree with him that there is a distinction
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between an affiliation fee and a donation. There is no way that we in the Labour party can be expected to treat an affiliation fee as a donation. It is not just about individuals; it is about policy. As a result of paying that money as an affiliation fee, the trade unions help us to develop our policy. I am happy and proud of that. The trade unions organise workers who create the wealth of this country. I am proud of the role played by the working class of this country, if I may use that phrase, and by the trade unions along with them.

Sir Alan Beith: I draw the right hon. Gentleman’s attention to the fact that the New Democratic party in Canada had a similar relationship with the trade union movement and was concerned that when a ban on donations was introduced in Canada, that link would be damaged or even broken. We took evidence about that when we were in Canada. What the party found was that it was able to persuade a very significant proportion of its members individually to join the NDP and found other ways of ensuring that they were granted opportunities to maintain and improve their relationship. The NDP was very content with the outcome.

Dr. Strang: The right hon. Gentleman will understand if I do not respond to his contribution and enter into a discussion about the NDP, as many hon. Members wish to participate in the debate.

The issue is fundamental for the Labour party and is one of the reasons we do not have before us the comprehensive legislation that the Liberal party would like. It may be that no change can be made until after the next general election.

In conclusion, these are important matters. If we believe in democracy, as we all do in the House of Commons, we need money to fund our election campaigns locally and nationally. I hope that in the course of the Bill’s passage, there will be movement towards some sort of understanding. Given where we got to in the discussions and the impasse that was reached, it was certainly worth while introducing a Bill, albeit not as major as might originally have been anticipated.

6.19 pm

David Howarth (Cambridge) (LD): I have been rather disturbed by how inward-looking this debate has been so far. We appear to be talking among ourselves and completely ignoring the view that people outside have of democratic politics, which we create by our actions and through this sort of debate. Outside the House, there is a crisis of confidence in our democracy, and it is just as profound as the crisis of confidence in the financial markets. Both issues are ultimately about trust—about whether one party trusts what another sells it in the market, or whether individual voters and electors trust anything that politicians say about their motives and what they really think.

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