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Lord Goodhart: I am grateful to the noble Lord for giving way. Does he accept that there is a significant difference here; namely, that if there was a suspicion--perhaps a well-founded suspicion--that he was accepting donations in this country from supporters in the US, it would be possible for the authorities in this country to get the police to investigate such an allegation? The problem in the Republic of Ireland would be that the only authorities which could investigate such a matter would be the Garda and that might prove to be a less effective form of investigation.

Lord Mackay of Ardbrecknish: As I understand the Republic of Ireland to be a friendly country, I do not see why it would be so difficult for an investigation to be undertaken. If there was doubt, and even if it could not be proved, it seems to me that the electoral commission could instruct the political party not to take the donation unless it could prove to the commission that it was a genuine donation from, for example, myself and not money that I had received from someone else. I do not accept that there is not a way round the problem. It is a good deal less damaging to the principle than the way that the Government have chosen, which is to exempt Northern Irish parties.

The noble Lord implied that other parties in Northern Ireland were keen on the measure. I am not entirely sure how up to date he is because I have a letter of 13th October 1999 addressed to Mr Varney, the head of the Party Funding Unit at the Home Office. The letter is from David Boyd, the General Secretary of the Ulster Unionist Council. The letter states, with regard to overseas donations:

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    Wales. However, we question the lack of balance which offers an exemption to Northern Ireland parties when the consequences of that exemption could have connotations beyond democratic politics. It is wrong that the practice will constitute a criminal offence in Britain when the same practice will allow the Republican Movement (IRA/Sinn Fein) to raise funds. It is not acceptable to argue that Northern Ireland must be treated differently because Sinn Fein are organised on an all-island basis. The same law should apply to all parties, which stand for election in the United Kingdom".

Therefore, the Government cannot pray in aid the Ulster Unionist Party, which is the largest party on the loyalist side of the divide in Northern Ireland.

Everyone knows what the measure seeks to do; namely, to allow Sinn Fein/IRA to continue to obtain large amounts of money from the United States. We know that it obtains that money because the political parties in Ireland must reveal large donations. The Irish Times of 17th May reveals the donations that emanate from the United States. Fianna Fail seems to do rather well in terms of donations from the United States. The Labour Party, the Green Party and Fine Gael do not do at all well; they score "blanks" in terms of declarable donations. However, Sinn Fein does extraordinarily well. Of the three declarations, two are from overseas, one from the United States and the other from Australia.

On the previous occasion we discussed the matter, the Minister failed to address the distinction that is being made here between Northern Ireland and Scotland and Wales. I shall mention Scotland, but exactly the same is true of Wales. However, to avoid repeating myself, I shall encapsulate them both.

In Ireland some people think that the status of Northern Ireland should be changed and that Northern Ireland should be part of the Republic. Some people in Scotland--I am not one of them--believe that the status of Scotland should be changed and that Scotland should become an independent country separate from the United Kingdom. I suspect that that belief is more prevalent today than it was two or three years ago, but that is a discussion for another day. In Scotland, the Scottish National Party advocates that policy at the ballot box and has done so for many years. While the odd nut at the edge of the nationalist movement has indulged in a little violence, the Scottish National Party itself has never been related to, connected with, or in any way supported violence.

In the Republic of Ireland the main party advocating a link up with the South has, as we all know, close links with violence. Much of the money which has come from America may have contributed to political party funding but has also contributed to the funding of arms. We all know that is the case and there is no point in pretending otherwise. All of a sudden, the Scottish National Party will not be able to obtain money from abroad. If an American citizen of Scottish descent becomes besotted with the "old country" and thinks that we all want independence and decides to give some of his money to the Scottish National Party, he will not be allowed to do that. However, his Irish American neighbour will be

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allowed to do that. I just do not understand the fairness of that proposition. It is not at all fair; in fact, it constitutes a reward for violence and a penalty for being non-violent. That cannot be right. That is the situation that the Minister will achieve. I understand that he is doing so with good intent but that is what he will achieve. He really ought to rethink this whole proposition with regard to excluding the parties we are discussing.

These amendments make Northern Ireland look quite separate from the rest of the United Kingdom by setting up a separate register. I do not know what kind of signal the noble Lord thinks that gives to the unionist community. Goodness knows, the signals it gets are all negative; hence the problems that David Trimble is experiencing. This is yet another negative signal. I strongly urge the Minister to think carefully before pursuing the measure. Even if the measure is passed, I hope that the Government will think carefully before they decide to implement it. If they say that they have not decided whether to implement the provision, but they will decide next year, is there anything in the Bill which would then remove the clauses we are discussing automatically to prevent them lingering on in the statute book? I believe that the Minister said that the Government hoped not to use the measure for more than four years. Is there a sunset clause with regard to the proposition so that at the end of four years it falls? Some such measure would certainly go some way to help to allay the fears of many of us that this is but another piece of appeasement to one particular party which, I regret to say, is bringing the peace process into severe difficulty at the present time. As I say, the Government should think carefully about this matter.

I shall leave the minor parties point until later as I have no doubt that the noble Lord, Lord Goodhart, will explain far better than I the defects of the Government's proposals in that regard.

9 p.m.

Lord Goodhart: There seems to be a rather surprising lack of enthusiasm from other speakers in this debate. I had intended to speak a little later but there appears to be a pause and therefore I shall speak now.

I should make clear my position. As I think most Members of the Committee know, I am a member of the Neill committee and was a member of that committee at the time it prepared its fifth report on party political funding. I do not speak from my party's Front Bench on this occasion as I have taken the view that I cannot speak or vote against proposals that were contained in the Neill committee report even if my party takes a different view--as it does on a number of issues, although not, I think, on this one. I am mainly concerned here with the position of the Neill committee.

I can certify a number of matters. I entirely agree with the noble Lord, Lord Mackay of Ardbrecknish, that we have too much tacked together in this group of amendments. The question of the Scottish Green Party

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should present no difficulties. On the question of the minor parties, I am encouraged by what the noble Lord, Lord Bassam, said but it is a matter which can better be discussed on later amendments which stand in my name.

The real question relates to Northern Ireland: the reporting of donations, and who is a permissible donor. At the centre of the group of amendments is Clause 65, which is intended to provide exemption from disclosure requirements and enable the Government to extend the list of permissible donors.

As regards the disclosure requirement, I believe that there is an overwhelming case for allowing an exemption from that for a limited period of time. The Government having said that they intended their regulations to continue only for a period of four years, I ask them to consider providing in the Bill that any regulations made under Clause 65 would require renewal at intervals of not more than four years so that they could be reconsidered within the normal life of each parliament.

When the Neill committee went to Belfast and talked to representatives of most of the Irish parties, although neither Sinn Fein nor the DUP, the overwhelming evidence--it was not quite unanimous--was that there was a strong case on personal security grounds for non-disclosure of substantial gifts. Also, businesses which in this country might wish to make substantial donations to a political party would find it impossible to do so in Northern Ireland because making a donation might alienate their customers or clients.

I welcome the Government's proposal to extend the application of the special rules from those parties which are represented either in the assembly or in the UK Parliament to all parties putting forward candidates. That is necessary. There is an absolute case for equal treatment. However, the nub of the question is the extension of the list of permissible donors to enable donations to Northern Ireland parties to be made from parties in countries other than the United Kingdom.

The Neill committee came to the conclusion that there was a strong case for extending to citizens of the Republic of Ireland the right to give donations. As were virtually all the recommendations of the Neill Committee, this was a unanimous recommendation which was endorsed by the right honourable friend of the noble Lord, Lord Mackay, Mr John MacGregor. It seemed to us that the citizens of the Republic have a genuine and legitimate interest in the political situation in Northern Ireland. After all, some 40 per cent of voters in Northern Ireland vote for parties which seek the reunification of the North and South. Many of those 40 per cent are citizens of Ireland as well as of the United Kingdom. In this country, John Major, for example, recognised that, if a majority of the citizens of Northern Ireland were to vote in a referendum for reunification, that would occur.

The situation in Scotland is entirely different. There is no proposal by the Scottish National Party that Scotland should become part of some other country.

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Those members of the Scottish diaspora who live in the USA and, because of their emotional and historic links with Scotland, wish to donate to the Scottish National Party seem to us to have no more justification to give to that party than they would have to give to one of the three main parties of Great Britain. We took the view, which the noble Lord, Lord Mackay, did not argue strongly against, that citizens of the Republic should be entitled to make donations to parties in Northern Ireland. We have to recognise that there are exceptional links between Northern Ireland and the South. For example, the Good Friday agreement provides for cross-border bodies.

The question is whether the definition of permissible donors should be extended to include citizens of the Republic of Ireland, as the Neill committee proposed, knowing that that would open a loophole for donations from the USA which could be laundered through friendly members of political parties in the South, or whether, as the Government propose, the ban on foreign donors should be lifted altogether.

The Government have taken a different view from the Neill committee and it is not for me to say that they are right to do so, but their proposals are nearer to the Neill committee's than are the Conservative amendments, which would simply apply to Northern Ireland the same rules as apply to the rest of the United Kingdom, making donations from the Republic of Ireland illegal on the grounds that citizens of the Republic were impermissible donors.

I am not entirely happy with the Government's proposals, but they are more acceptable than those in the Conservative amendments. There is no amendment that proposes a return to the original Neill committee proposals.

That is all that I feel able to say on the issue.

9.15 p.m.

Lord Mackay of Ardbrecknish: Before the noble Lord sits down, I should like to ask him a question. I have listened to him with interest and I agree with a lot of what he has said, but I think that he dismissed the Scottish diaspora too briefly, comparing them with the citizens of the Republic. He should address the issue of two next door neighbours in America, one a member of the Scottish diaspora and the other a member of the Irish diaspora. Why should one be allowed to donate to a political party back in the old country while the other is not?

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