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In a fast-moving democracy that relies on volunteers and voluntary donations, it would seem to be bad law to make things that complicated. The danger is twofold.
First, it means that politics becomes about the process of politics, and it means that individuals and parties hurl allegations at each other in a way that can only damage the general reputation of politics and drag all parties further downwards. If, under clause 8, one party finds something wrong with somebody's declaration, the natural reaction of the other parties will be to find things wrong with the alternative party or parties, through the declarations. They would then throw allegations-perhaps fair, perhaps unfair. That will become part of a process of making politics about whether parties stick to the box-ticking letter of the law, rather than about the big issues that concern constituents and enliven political debate and general elections.
When we get into that kind of snare or trap, we will find that all parties will want to go for more state funding instead. As the Justice Secretary has rightly said, that would be exceedingly unpopular with voters of all dispositions at the moment. However, the more it is made difficult for individuals, companies and trade unions to put their money into political parties on a voluntary basis, the more the political parties will seek other ways of finding state funding-and at a time when the state does not have any money and is having to borrow it all. The public would think that that was extremely unreasonable.
Kelvin Hopkins: The simple answer to all that is to have a savage cut in permissible spending on elections.
Mr. Redwood: I have rather more sympathy for that view. I have said that I favour a tighter cap on election spending, affecting all the major parties. It would be much easier to control any problems that parties may see in the current system through spending controls, rather than through donation controls. That would be easier to police. We know that it is quite possible to police a spending control because there is one in place at the moment; such a control applies to each one of us when we seek re-election, and applies at the national level to each major party. There have not been too many problems with those spending caps. That is a productive and sensible suggestion. I cannot see why we need also look at limiting categories of people who are allowed to donate.
As hon. Friends have said, if someone is entitled to vote in an election, surely they should be entitled to back their vote with a donation. If someone is allowed to run for office in an election to gain even more influence, what is to stop them making a donation to support their or someone else's campaign? The whole thing is quite absurd if looked at from the outside. It makes sense only if one goes down the route taken by the hon. Member for Pendle and reveals the raw politics behind the rather elegant legal debate that we have had, for most of the time, this afternoon.
I urge the Government to think again. Such changes cannot be made without consensus. They relate to the system of election for all parties, and they need to be seen to be fair by all parties involved, but that clearly is not so with this Bill. Such changes cannot be made in haste, and the latest, very chunky, amendments that we are considering have been drafted very quickly, in a way that not even the Government think is reasonable.
Mr. Geoffrey Clifton-Brown (Cotswold) (Con):
As always, my right hon. Friend makes a cogent and logical case. Does he not agree that the logic of his case extends
to those people, whom all political parties have recognised, who live abroad and have resided in this country within the past 10 years-the period has been varied, but it is currently 10 years-and who are entitled to vote? They ought also to be entitled to give a political donation, if they wish.
Mr. Redwood: That is exactly my view, and the view shared, I think, by most Conservative Members. I recommend it to the Government, because they will have supporters in a similar position-supporters who will feel cut out by the unwillingness of the legislation to allow them to participate fully in the way that other legally registered British voters can by virtue of residence.
It is a dangerous principle to say that someone has to pay tax in a country to participate in its politics. There are all sorts of people in our country who, for good reasons, do not pay tax. Full participation cannot be linked to taxpaying. It is rather divisive to say otherwise, and I find it surprising that that view is taken by the Labour party, which normally stands up for people without much money who do not pay tax for that reason. It is strange to apply the argument in one direction but not in the other, when it comes to the issue of taxation. The American democracy may well have been based originally on the principle of no taxation without representation, but we do not want the principle that there can be full participation only with taxation. That would be a very odd principle indeed in a society where some people do not pay tax for good reasons.
I hope that the Government will take the proposals away and think again. We know that they will think again, because their Front Benchers have promised that other amendments will be necessary to try to make sense of the inadequate amendments before us. I repeat what was said in an earlier exchange: it is quite wrong that something so important and fundamental to our democracy-issues relating to the participation rights of a wide range of British people-should be handled in such a way, at the last minute, without proper time for consideration of the amendments, without a further attempt to create consensus across the Chamber, and without proper discussion of the final amendments, which needs to take place.
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Martin Linton: I thank my hon. Friend the Member for Pendle (Mr. Prentice) for raising the issue in his original amendment, Lord Campbell-Savours for tabling the amendment and winning the vote in the House of Lords, and my right hon. Friends on the Front Bench, who have shown great wisdom in accepting the amendment. They are right to say that it raises practical difficulties, but those are not insuperable.
The Political Parties, Elections and Referendums Act 2000 set the test that a donor should be registered for voting purposes, not resident for tax purposes. That was not my preference, but that test was set because it was the simplest. For most people it amounts to the same thing-to be registered, they must be resident in this country. However, it is possible to be registered as an overseas voter, for which I fought hard at the time. Although we should protect the right of UK citizens who live abroad to vote in UK elections for a limited period, it was never intended that that should act as a loophole for people who go abroad to escape tax liabilities to continue to enjoy the right to bankroll British elections.
People who go abroad for tax purposes should not interfere in our elections. If they do not pay our taxes, why should they have any part in determining those taxes? The right hon. Member for Wokingham (Mr. Redwood) cited the American slogan, "No taxation without representation," and said that the reverse would be unfair-no representation without taxation. We are not arguing for no representation without taxation, but we are arguing that if people do not pay the taxes of the country, there is no reason why they should seek to invest millions of pounds in trying to win the election. Whether money in an election works or not-I have written a book on the subject-is not the point. It is clearly intended that it should, and sometimes, clearly, it does.
Mr. Graham Stuart: I wonder whether the hon. Gentleman realises what an unedifying sight it is to see two Labour Members in marginal seats who, despite the vast expenditure given to them over the years by the taxpayer to spend in their areas, cannot bear the idea that candidates from Opposition parties should have relatively small amounts to be able to have any part-time help to put out any form of communication to the electorate. It is clear that Members on the Government Benches think that Labour, like some monster, should be able to roll on while those in Opposition should be able to spend and do nothing.
Martin Linton: The hon. Gentleman should keep his speech for when he is called. What he said has nothing to do with what I was saying. I seek a level playing field, justice and fairness in elections. That is my sole motivation. I do not do so because of any personal problems in my constituency.
Let us investigate the principle of taxation and influence in the electoral system. It is no accident that it was the House of Lords that passed the amendment. Their lordships were the first to see a clear connection between paying taxes and the right to be a Member of this legislature. As my hon. Friend the Member for Pendle mentioned, the House of Lords Appointments Commission recently announced that it will not accept any new peers who are not resident for tax purposes. That test, being resident for tax purposes, should have been in the 2000 Act. It is now being introduced by the House of Lords Appointments Commission.
Indeed, the other place is debating a Bill that could lead to tax exiles being deprived of their titles, which would be only right. Lord Laidlaw has already been forced to take leave of absence from the House of Lords after failing to abide by a pledge to move his tax affairs onshore. He was appointed on the understanding that he would pay tax in this country, but he has not done so. Their lordships see a clear connection between paying taxes and influencing elections. I do not understand why hon. Members are so slow to see that connection.
The House of Commons has been through a very difficult time in the past few months over the expenses scandal, with many MPs being publicly and humiliatingly disgraced-some rightly, some wrongly. Our job now is to audit MPs' expenses and see whether we can identify and punish wrongdoing and clear other MPs of the dark clouds of suspicion that hang over the whole of Parliament. It is our job to clean up politics, and the
amendment is a part of that. It will not do MPs of any party any good to vote against the amendment or even to speak against it. That throws us right back into the morass from which we are trying to escape.
Mr. Clifton-Brown: The hon. Gentleman has acknowledged that he supports the system of overseas voters. Why, therefore, does he discriminate against those voters in the amount that they can give to political parties?
Martin Linton: Of course somebody who goes abroad temporarily to work should retain the right to vote if they wish to retain it. They will also have the right to donate up to £7,500 to an election campaign. I do not think that that is any great infringement of their democratic rights. They know that by going abroad, they put themselves in a position where they cannot maintain the right to influence elections in this country indefinitely. They know it is time-limited, and the amount of money that they may donate to political parties in this country can also be limited.
Finally-this perhaps is a consensual point to end on-I strongly believe that we should introduce gift aid for small donations to political parties, so that the money that might come out of the political system through the amendment can be put back in through a fair system of tax exemption on donations. I tried, with my hon. Friend the Member for Pendle, to table an amendment to the Finance Bill that was originally tabled in the House of Lords with support from Conservative and Liberal Democrat peers. It was the subject of consensual all-party agreement, and it would help to put back into the political system the money that is being taken out. It is far better to rely on a large number of small donations than to rely, as we do at present and which we are trying to change, on a small number of large donations.
Mr. Graham Stuart: It is a great pleasure to follow the previous speakers, especially the hon. Members for Pendle (Mr. Prentice) and for Battersea (Martin Linton), two notoriously narrowly held Labour seats. No one in the House or outside will be fooled by the passion with which Members in such marginal seats view the relatively small funding, as I said in my intervention, given to those trying to oppose the Government and putting themselves forward for election.
The vision for Labour Members, it seems, is to ensure that the trade unions can continue to buy influence within the Labour party. In the last returns, 80 per cent. of the funding of the Labour party came from the trade unions, yet the Government find themselves in negotiation with those trade unions time and again. They want that to happen while barring those who are entirely eligible to vote from being able to back their preference by funding it in the way that others in this country do.
While hon. Members are seeking to bar, through the amendment, people who live abroad from contributing as residents do, they are happy to see funding from Lord Paul, for instance, whose companies bought the Armstrong Group, with many of my constituents losing their pension fund because it was put into liquidation to escape the pension liabilities that the company owed.
Pete Wishart: The hon. Gentleman has twice mentioned the relatively modest sums secured from such funding. For the benefit of the House, will he indicate how much that is?
Mr. Stuart: I am not entirely aware of the sums. Lord Ashcroft is the demon in the minds of Labour Members, who sit there nursing their marginal seats, knowing that the electorate is coming for them. It is that knowledge that drives them on. In their fevered imagination, they see Lord Ashcroft, like some great grey figure hanging over them, sentencing their seat to lose to the Conservatives. To help slay Labour Members' demons, I should say that Lord Ashcroft's donations are far less than those of Lord Sainsbury. We hear about corruption from the Labour party, but a man who was serving as a Minister in the Government gave millions of pounds to them. What about the conflict of interest there? Did we hear the hon. Member for Pendle on his feet day after day campaigning with the hon. Member for Battersea against that conjunction? No, we did not.
Lord Ashcroft's donations are on the public record. They are easy to find, a fraction of what Lord Sainsbury has given to the Labour party and, when broken down by constituencies, amount to a number of tens of thousands of pounds that have simply allowed for the employment of part-time staff and for communication with the electorate-upon which so much of our politics depends. Do I feel embarrassed or am I squirming about that? Quite the contrary: I am delighted that Lord Ashcroft, somebody of such public spiritedness who set up Crimestoppers and has been such a great philanthropist, also recognises the damage that this Government have done to this country. That is why I am so proud to have him as one of our many supporters. We, the Conservative party, are reliant on Lord Ashcroft for a tiny fraction of our income when compared with the income of the Labour party, the massive majority of which comes from the trade unions.
Mr. Gordon Prentice: Will the hon. Gentleman give way?
Mr. Stuart: In order to be brought back to the measure that we are debating, I shall give way to the hon. Gentleman.
Mr. Prentice: I have a simple question: can the hon. Gentleman tell us whether Lord Ashcroft is a UK resident for tax purposes and has been since his elevation to the peerage in 2000?
Mr. Stuart: I can tell the hon. Gentleman straightforwardly that I have absolutely no idea; it is entirely a matter for Lord Ashcroft.
The situation tonight is most unedifying. Ministers recognised that the Lords amendments had no proper place in the Bill but, to throw red meat to the likes of the hon. Gentleman and the hon. Member for Battersea and try to buy off rebels, have decided to allow clause 8 to go forward-despite the fact that it will not work in practice. The hon. Gentlemen are clearly fixated by people of great wealth who might want to donate to political parties, but anybody of any great wealth will of course have companies in which they are major shareholders, and, unless we want to restrict British companies that trade fully in this country also from participating in and supporting British politics, which seems to be the view of the hon. Member for Cambridge (David Howarth), we will find that the clause will be completely ineffectual. I imagine that the Secretary of State, when he discussed it with his colleagues, decided that, like so much of the Government's current legislation,
it would not work but, if it appeased Labour Members on the far Back Benches for a while, would be a price worth paying-even if it were of no real moment.
We need to clean up politics, but we need to recognise the real demon that afflicts our political system. The real demon in political funding is not Lord Ashcroft or any of the other thousands of people who donate to the Conservative party; it is a Labour party that is entirely dependent on funding from the trade unions; and a Labour party whose Ministers sit down with Warwick agreements 1 and 2. It is that relationship which is utterly corrupt, indefensible and should be the subject of legislation, not this partisan effort by the Government today.
Mr. Cox: I am going to steer away from partisan rhetoric, because there are some fundamental points that must be considered. I have in mind, particularly, the gauntlet that the hon. Member for Cambridge (David Howarth) so thoughtfully threw down to me, regarding what might be the legitimate objective of the Government's amendments. It has caused me a degree of reflection, because what was striking in the Secretary of State's account of the reasons for the amendments was the almost complete absence of a substantive justification. Indeed, I asked him to give one, saying, "What is the rationale for linking the right to donate to the obligation to pay taxes in this country?" Hansard will show his response, but, as I recollect, he said, "Well, I have made the same argument as you have." I have not heard a more half-hearted-indeed, a more apologetic-defence of an amendment since I have been a Member, which I accept is not a very long time.
Mr. Redwood: Does my hon. and learned Friend think that the weakness of the argument is the reason there are now no Labour Back Benchers in the Chamber in their seats? Does he think that they are ashamed of the proposal?
Mr. Kevin Barron (Rother Valley) (Lab): That is not true!
Mr. Cox: One has just appeared.
I must say that I have been reflecting on my right hon. Friend's point as we have been debating.
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I wanted to consider the legitimate objective that the hon. Member for Cambridge gave, but I have to say that it is a remarkable thing, when a Government amendment is best justified by a speech from a Liberal Democrat Front Bencher. However, I listened with interest and a degree of reflection when the hon. Gentleman postulated that, in the Bill before us, the legitimate objective that is being fulfilled is, in effect, the prevention of big money influencing elections, as I think he put it.
I should not subscribe to the free-for-all for which some people criticise the United States system, and I accept that it could be perfectly legitimate to impose a general prohibition, cap or ceiling on donations. However, what I find extremely difficult to understand is how there can be a rational justification to require somebody to pay taxes in this country before they can donate, but not require them to pay taxes in this country before they can vote. I have been wrestling with it from the very beginning and do not understand it.
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