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7 pm

There are, however, some problems with the Bill as drafted. I am glad that the Secretary of State said that the proposals would be considered further before they finally pass. The point about the student that the hon. Member for Ribble Valley (Mr. Evans) mentioned in his first contribution does not work. The Secretary of State did not reply to it, but my understanding of existing law-he might correct me if I am wrong-is that volunteering in someone's own free time does not count as a donation. That point is also important in answering the issues raised by the hon. and learned Member for Torridge and West Devon. This is not a restriction on political activity across the board; it is merely a restriction on donating money.

Mr. Cox: The hon. Gentleman suggests that this is a merely a restriction on donating. This is a matter of freedom; this is a matter of the free expression and the full implementation of expression of one's political opinions. If I have worked hard by getting donations down the street or however I have acquired my money, I should be entitled to put it behind my political opinions.

David Howarth: The hon. and learned Gentleman is right to make that point, but it is one with which I fundamentally disagree. This really is the heart of the matter, and I am glad that we have reached it. The view that money equals freedom in all circumstances is one that, as far as I can tell, only the US Supreme Court takes. I have great respect for the US Supreme Court, but very few other political systems take that view to that extremity.

Every other political system tries to balance the expressive part of spending money on a campaign-supporting a candidate by making a donation that the candidate uses to make their case-and the interest of equality of arms in the political system so that we do not have political system that depends on who has the richest donors. If one is to balance the two, one can conclude that the provisions are justified. Moreover, one must take the view that, to balance the two, one must be in favour of a cap on donations of any sort at all. The hon. and learned Gentleman seems to be arguing against any sort of donation cap under any circumstances; otherwise donors might be told that they cannot express themselves any more by making a donation above £50,000, £10,000 or £7,500. There must be a limit.

Mr. Cox: As the hon. Gentleman seeks to characterise my argument, let me say at once that I might well support of a general cap on donations, but it would have to be done fairly and consistently, and the problem with the measure is that it is not fair and consistent. It may well be said that a proportionate limit on all donations allows for the freedom that I have described, while making allowance for the points that he makes,
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but it cannot be done piecemeal. The suspicion would be that it is ad hominem, targeted deliberately at a specific target and done for naked political reasons.

David Howarth: But the hon. and learned Gentleman cannot argue that money equals speech and then argue for a cap. That is entirely inconsistent.

Kelvin Hopkins (Luton, North) (Lab): I agree entirely with the hon. Gentleman, but the association between money and freedom is a freedom only for rich people, not for poor people, and the whole point of democracy is that our freedoms should be equal.

David Howarth: The hon. Gentleman makes the very important point that if we were simply to equate money with political freedom, the rich could donate vast amounts to their parties and get an enormous advantage over the poor, even if the poor were donating a higher proportion of their income to their favoured parties. That cannot possibly be a political system that counts as fair and just.

Mr. Cox: The hon. Gentleman mentions poor individuals, but those who are in positions not of individual wealth band together; they form unions; and they make donations worth millions to political parties. If we cap those donations as well, that is fair and fine.

David Howarth: The hon. and learned Gentleman tempts me to go down a different route, but if he returns to the amendments proposed on Report in the Commons, he will see that my party made a proposal that would have dealt fairly with the union link with the Labour party, but I do not want to go down that route, because it is not before us tonight.

Let me conclude by pointing out a couple of difficulties in the present draft of the Bill. First, it is not clear whether the legislation would be easily evaded simply by using companies as a conduit for donations. There appears to be an inconsistency between two parts of the way in which the provisions work. They start simply by talking about whether individuals satisfy particular tax status rules, but the declaration part of the provisions talks about whether that individual has caused a donation to be made. That seems to be different. Whether an individual is a permissible donor based on their tax status is one question; whether the person has caused a donation to be made is a second question. One can cause a donation to be made without being a donor oneself: one can use a company as a conduit or agent. The Government have got things half right. In the declaration provisions, they are getting there-it is about causing donations-but they need to think about whether the provisions themselves, not just the declarations provisions, should cover people causing donations to be made. In fact, in previous debates on this matter, we proposed, without any vote being called, provisions that would, in effect, equate the individuals who control companies with those companies. That would have the effect of changing the entire position.

Let me end by talking about consensus. Throughout the debates on the Bill, for almost a year, the Government have said that it is not possible to make any further progress with the Hayden Phillips proposals, with the cap on donations that would apply to everyone, with global spending restrictions and with a fair resolution of the relationship between the Labour party and the unions, because there was no consensus. In effect, the
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Conservative party had a veto on any progress on those matters. We now reach this late stage on the Bill and-the hon. Member for Huntingdon must be right about this, because he makes it so, by the very fact that he objects-the Government have broken that consensus. I very much regret that the Government have wasted the opportunity, throughout the rest of the debates on the Bill, to break the consensus in a far more general way and, to take one of the points made by the hon. and learned Member for Torridge and West Devon, to produce a comprehensive settlement of the party funding issue in a way that would have satisfied the public, even though it might not have satisfied the parties.

Mr. Straw: To suggest that the reason that we did not make progress on the Hayden Phillips proposals was simply that the two main parties did not agree is to parody what happened. The simple fact is that, among many other objections to implementing the Hayden Phillips proposals, is an overwhelming one that illustrates that there is no consensus with the public and that the Liberal Democrats refuse to acknowledge but is correct: the Hayden Phillips proposals are predicated on a high level of state funding. I do not believe that there is a consensus for tens of millions of pounds of additional public money to be used to support the political parties at the moment. That is the fundamental problem.

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. After that little exchange, we had better come back to the amendment.

David Howarth: Thank you, Mr. Deputy Speaker.

I do not accept what the Secretary of State says; I do not think that he has got the Hayden Phillips proposals right anyway.

Turning back to the proposals before the House, I am glad that the consensus on this matter has been broken. I simply regret that it was not broken earlier.

Mr. Gordon Prentice (Pendle) (Lab): So far this has been a conversation between lawyers. I am not a lawyer, and I want to alert the House and the people outside to what this is all about. It is about very rich people buying elections. We can listen to the exchanges between lawyers until we are blue in the face, but that is what it is about-multimillionaires who live abroad buying elections.

I congratulate my friends on the Front Bench on listening to Labour Members and to my friend Lord Campbell-Savours, who moved my amendments in the House of Lords. I am grateful to Lord Campbell-Savours and to my friend the Member for Battersea (Martin Linton), who has championed this issue for many years. When the tax exile amendments, if I may use that shorthand, were tabled in the House of Lords, more Labour peers voted against the Labour Government than voted for them-there was a majority of 22, including two former general secretaries of the Labour Party, Lords Sawyer and Whitty. That was the extent of the alliance. My friend the Justice Secretary said, in his opening remarks, that the Government were listening to the alliance-it was a huge alliance. Many of us think that the Government should have addressed the issue of the super-rich buying elections years ago.

Mr. Redwood: How does somebody buy an election? Did Labour buy its victories in the last few elections?

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Mr. Prentice: I am going to come to that point.

I want to address the issue of consensus. Lord Bach, who led for the Government in the other place, said:

I take a different view. I think that on this issue it would be impossible to reach consensus with the Conservative party. It was never going to agree to turn off the tap that feeds millions of pounds from tax exiles into the party coffers.

Mr. Graham Stuart (Beverley and Holderness) (Con): Will the hon. Gentleman give way?

Mr. Prentice: No, I will not.

Bob Spink: Will the hon. Gentleman give way?

Mr. Prentice: If I am going to give way to the hon. Gentleman I will have to give way first to the hon. Member for Beverley and Holderness (Mr. Stuart).

Mr. Stuart: I am grateful to the hon. Gentleman for giving way. As he is aware, the latest figures for Labour party funding show that 80 per cent. comes from the trade unions, and we know what impact that gives them on our national life. It was Conservative Members who proposed a £50,000 cap on donations, and it is grossly unfair to suggest that there was no possibility of reaching a consensus with us. The Labour party cannot carry on with its downright corrupt situation with the trade unions and blame us for any failure.

Mr. Prentice: We take what the hon. Gentleman says with a shovelful of salt because in an earlier intervention he referred to the communications allowance and, from memory, I think he said that Labour Members voted themselves that allowance. In 2007-08, 158 Conservative Members claimed that allowance, and the shadow Cabinet collectively claimed a total of £185,000 through it.

Bob Spink rose-

Mr. Deputy Speaker: Order. Before the hon. Member for Castle Point (Bob Spink) is allowed an intervention, we should remember what is in the terms of the amendments that we are discussing. These wider exchanges are not very helpful when a number of people still want to speak and we do not have all night at our disposal.

Bob Spink: I am very grateful for that advice, Mr. Deputy Speaker.

I congratulate the hon. Member for Pendle (Mr. Prentice) on having done democracy a fantastic service with his long-standing campaign that he is now winning. In the end, right will out. The hon. Gentleman has been fighting to secure our democracy and remove the abuses of party political and election funding. We see those on the Conservative Front Bench squirming, trying to stop the amendment being made, and we all know why: they want to continue the abuses. They want to continue to allow Lord Ashcroft and others who live abroad to abuse the system and fund political parties unfairly and in an unbalanced manner.

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7.15 pm

Mr. Prentice: I thank the hon. Gentleman for that point.

Why are the amendments needed? I restate this fundamental truth: it is possible to buy an election. I invite colleagues to visit and click on the blue rosette to find out exactly how much money is being spent in my constituency. There has been a cascade of money over the past two years. [Interruption.] It is not about Gordon Prentice holding on to the Pendle seat; it is about rich individuals pumping millions of pounds into constituencies across the country and buying the next general election.

Lord Bach said in the other place that expenditure outside the short period before an election is effectively deregulated. If a rich individual wanted to spend £1 million, £2 million or £5 million a year in a constituency, nothing in the law as it stands would prevent them from doing so. These multimillionaires, some of whom have written books about their tactics, live in their tax havens and influence our politics by bankrolling political parties and buying elections, and their actions pollute our democracy. It is scandalous that Conservative Members, with their lawyerly language, tell us that there are higher considerations that we must take into account. There are no higher considerations.

After its experience with the Conservative peer Lord Laidlaw, the House of Lords Appointments Commission now makes tax status a determining factor in deciding whether to elevate someone to the House of Lords. Why does the Appointments Commission do that? It was because Lord Laidlaw, a former vice-chairman of the Conservative party and a self-confessed tax exile living in Monaco, told the commission prior to his elevation in 2004 that he would bring his tax affairs onshore, and then he refused-he reneged on that promise. But he still gave £3 million to the Conservative party and over £100,000 to a candidate for the mayoral elections in London. The Conservative party did not consider that to be tainted money and handed it back; no, it held on to those millions from Lord Laidlaw. Of course, it is not just Lord Laidlaw; there are other Lords as well.

Let me finish on this point, in case I am straying out of order: we have heard that there is to be a £7,500 threshold for donations to political parties. Multimillionaires and others who want to give a lot of money to political parties will have to sign a declaration that they are a permissible donor, which will include a reference to their tax status. It will be a criminal offence for them knowingly to give an inaccurate or false declaration, and I say three cheers for that. If they knowingly mislead the wider public, the political party and, indeed, Parliament, they can be sent to jail. These declarations are not new. When we stood, all of us, for election to the House of Commons we had to sign a declaration, which went to the returning officer, saying that to the best of our knowledge we were not disqualified from sitting in this place because, for example, we were a peer or had a criminal record. The idea of asking someone to sign a declaration is well established.

The Member for Huntingdon (Mr. Djanogly) raised a few canards earlier. He said-I have heard this until I am blue in the face-that the proposal is hard to implement. Of course it is, but I look to my friends on the Front Bench and to the brainpower of the civil service to close the loophole; that is what we want them
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to do. We heard from the Member for Huntingdon that the proposal is contrary to European law; well, let that be tested in the courts. We are absolutely doing the right thing. I shall vote for the Government tonight, and I urge all my friends to join me in the Lobby to make sure that the provision gets on to the statute book.

Mr. Redwood: We heard the authentic voice of Labour in that speech from the hon. Member for Pendle (Mr. Prentice), who has insulted the British electorate in a big way. I do not believe that it is possible to buy an election in the way that he suggests. No matter how many millions the Conservative party might have spent in 1997 if the rules had been different, we would have lost. No matter how much money Labour spent in the European elections this year, they would have lost. The British public are quite able to discern what they want and who they want, and they are not driven by the biggest-spending party on any given occasion.

The hurried and perhaps botched amendments that we are considering worry me for both general and specific reasons. I think that they are botched because, as the Justice Secretary kindly admitted, he will have to return to them in the other place, as he knows that they do not deal with all the matters that are coming out in this rather short debate, and that will come out as further consideration is given to the Bill. That shows the danger of legislating in such haste, after quite a long period in which proper consideration could have been given, both in the Chamber and in more general consultation.

My general concern about the new proposals is that they are part of a drift to ensnare our politics in so much legalese and complexity that it puts off many amateurs who would otherwise be involved and be able to participate. I referred in an intervention to the plight of a party treasurer of whatever party. It is difficult enough to conform with the Political Parties, Elections and Referendums Act 2000. We have seen all parties get into difficulties-inadvertently, I am sure. I am sure that they are trying to comply. Even that legislation has proved quite demanding and quite complicated, but as we have heard from Front Benchers of both main parties, it has the merit that all that the treasurer or other responsible official has to do is prove that the individual is registered to vote in this country and is on the electoral roll. There is a roll to which they can refer, and which is reasonably accessible, to establish that they have had due diligence.

The proposals before us involve considerably more complication, in that three separate tests would be applied, and then a person would have to try to ascertain whether all the forms had been accurately filled in. I understand that there is to be self-certification by the individual seeking to make the donation, and that is where the burden will lie. As my hon. Friend the Member for Huntingdon (Mr. Djanogly) explained, that individual could genuinely be unsure, or they might make a perfectly accurate declaration, but the facts and circumstances might change subsequently. Given the speed with which events can occur during an election campaign, it would be quite possible to imagine members of different parties making mistakes. There would be a long legal process afterwards to try to sort it all out.

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