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The Chairman of Committees (Lord Boston of Faversham): As Amendment No. 74 has also been spoken to, I must point out to the Committee that, if Amendment No. 74 is agreed to, I cannot call Amendment No. 74A.

Lord Bassam of Brighton: I enjoyed that mischievous and circuitous trip around the Bill and its contents. With these amendments we return to ground which has already been trodden in another place. I welcome the opportunity to explain the purpose of subsection (8) of Clause 23. It is not quite as the noble Lord, Lord Mackay, in his very entertaining way, described.

It is indeed the case that there are trade unions which are affiliated to the Labour Party and which, going solely by the party's constitution, would be regarded as

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parts of the party. If that were not so, the question of their inclusion in or exclusion from the party's scheme would simply not arise. But it should be remembered that the schemes adopted under Clause 23 are to be solely for the purpose of regulating the financial affairs of the party. They are not intended as a comprehensive description of what constitutes a political party. That is the key point for the noble Lord to take away from this debate.

As the noble Lord has pointed out, the Labour Party does indeed receive substantial amounts of money from the trade unions, properly and openly raised and accounted for under the distinct statutory arrangements which exist precisely for that purpose. Far from being a device to obscure those financial or political links, the very purpose of subsection (8) is to ensure that such funding and the relationship are transparent. I am confident that, when he reflects further on the matter, the noble Lord will accept and agree with this.

The controls on donations set out in Part IV of this Bill regulate the receipt of funds by a political party from other sources. They do not regulate a political party's internal transactions. If affiliated trade unions were included within the schemes for regulating parties' affairs for the purposes of the Bill, the first consequence would be that the party would then not be obliged to declare donations to the party from the trade union. The movement of the money would be on a par with, for example, affiliation fees paid by constituency organisations to the central headquarters of a party--an internal party transaction with no requirement for the payment to appear in the party's donation reports. I am sure that the noble Lord would agree, on reflection, that that would not be right.

One purpose of the Bill is to enable the public to gain a reliable account of where the money available to political parties comes from, and to compare one with another as to the money they receive and spend. In the public mind, and in reality, trade unions are donors to a party. Figures which excluded their contributions would be wholly misleading. A further consequence would be that, under Part III of the Bill, the party concerned would have to account for the financial affairs of the trade union--and for all its affairs, not just those relating to political activity. That is wholly unnecessary, given the substantial statutory regulatory provision which already exists for that purpose in legislation put in place in large measure by members of the party opposite. It would also be misleading and confusing. The treasurer of a political party does not in fact have any control over the financial affairs of an affiliated trade union and to create a scheme of control, when separate provision is already in existence, would be a difficult as well as a pointless exercise. Furthermore, it would burden the electoral commission with a large amount of financial information in which it would have absolutely no interest.

Subsection (8)(c), which Amendment No. 74 would remove, provides for the Secretary of State to prescribe by order other categories of organisations which are

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also to be regarded as not forming part of a party's structure for the purposes of the controls set out in the Bill. Again, the purpose of the provision is to provide a mechanism for ensuring that parties are not required to account for the financial affairs of organisations which have a relatively autonomous existence and, at the same time, ensure that transactions between parties and such organisations are subject to the controls set out in Part IV. The alternative is for a party to be responsible for independent affiliated organisations over which they have no financial or administrative control.

I am slightly surprised that the noble Lord is seeking to remove the order-making power in Clause 23(8)(c). We have already invited existing registered parties to put forward organisations mentioned in their party's constitution which should be included in a Clause 23(8)(c) order.

The Conservative Party for one has responded positively to that invitation. It has put forward a number of candidates for inclusion in such an order, including the Association of Conservative Clubs, the Conservative Medical Society and the Society of Conservative Lawyers. Indeed, I believe that I have some correspondence, a copy of which has come into the unit, which lists a whole range of other very interesting and worthy Conservative groups such as Conservatives at Work, the Conservative Disability Group, the Conservative Foreign Affairs Forum, the National Conservative Women's Council, the Tory Green Initiative, the Society of Conservative Accountants--that sounds an interesting body--the Association of Conservative Clubs and even the Association of Conservative Peers. It is clear to me that the Conservative Party understands the purpose of this clause and why it has been included in the Bill. If Conservative Central Office can see the case for Clause 23(8)(c), I am sure that the noble Lord can also be persuaded that the provision should stand as it is.

Having received a number of proposals for inclusion in a Clause 23(8) order, it is apparent that the organisations affiliated to existing registered parties do not all lend themselves to being classified by generic descriptions. The government amendment in this group therefore enables an order to specify individual organisations as well as generic classes of organisation.

No decision has been taken on which organisations should be included in a Clause 23(8)(c) order. Existing registered parties have been given until 23rd October to put forward their nominations. We shall need to move quickly thereafter so that the order can come into force two weeks after Royal Assent. This will tie in with the start of the six-week compliance period during which existing registered parties will have to send their draft scheme to the electoral commission. I should also emphasise that in making any order under this clause, our aim is to proceed on the basis of a cross-party consensus. There should be no question of any party seeking to obtain partisan advantage from this process. Indeed, I would not suggest for a moment that the noble Lord opposite would go along such a path.

I trust that, in the light of my explanation, the noble Lord will feel able to withdraw his amendment.

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11.15 p.m.

Lord Mackay of Ardbrecknish: That explanation was more interesting for what it omitted rather than for what it actually said. Of course I am familiar with subsection (8)(c) and the exchange of correspondence. However, I am not entirely certain that even for a moment the various associations of the Conservative Party mentioned by the noble Lord, any more than those of the Liberal Democrats or the Labour Party, will be in a position to spend a great deal of money as third parties in the election. I wondered about the Association of Labour Lawyers in that I am not sure whether I could include it in the list of those not able to spend £1 million. However, I doubt if it will do so. I should imagine that the lawyers make their donations rather more directly.

Lord Bassam of Brighton: I should think that the Society of Conservative Accountants might be able to offer a few pennies as well.

Lord Mackay of Ardbrecknish: They might be worth a few pennies, as I hope are the Conservative lawyers. Frankly, however, I doubt if they will electioneer as a third party. There is no evidence that any of those organisations have electioneered as a third party, which is my main point.

I noticed that the Minister did not confirm or deny my assertion that affiliated trade unions--I am not talking about other trade unions--would be able to give money to the Labour Party and be able to spend up to £1 million as third parties. If my memory serves me rightly, UNISON spent quite a lot of money at the previous election campaigning on issues which it thought were important and which were fairly directly connected with the direct proposition that one should vote Labour.

There is a huge difference between the various organisations he read out in subsection 8(c) and the organisations in subsection 8(a). His argument on subsection 8(a) was very simple. His first argument was that if trade unions were not outside the schemes in the Bill, all their financial affairs would have to be included--not only the ones involving political activity. I cannot believe that the Government and their officials would find it impossible to meet this point by including the affiliated trade unions and so on in the Bill for the purposes of political expenditure--that is, making the whole Labour Party, including the trade unions, subject to the £20 million limit.

The other interesting proposition is that the party would not be obliged to declare donations from a trade union were it not for this part of the clause. That is a totally spurious argument. Not only does the Labour Party publish the details of money it receives from the trade unions in its annual accounts, but the details of trade union political funds are regulated and made public. Unions are required already to make annual returns of their financial affairs available for public inspection. That is made perfectly clear in paragraph 6.21 of Lord Neill's report. I am afraid that the noble Lord's argument about that does not really stand up.

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The open agenda here--it would be nice if we had a bit of open government--is to allow organisations which are reasonably wealthy and interested in politics not only to affiliate to and be actively involved in the Labour Party, not only to give the Labour Party large amounts of money, but to be able to spend large amounts of money--outside the cap on the political parties--on electioneering as third parties.

It would be refreshing if the Government were to own up. It is a simple proposition. The Minister knows that I am quite correct that this will happen. Is the Minister denying that this will be the consequence of the clause? Of course he is not. He cannot because this will be the consequence. However, at this time of night, I have made my point. I may return to it at a later stage if I think I can appeal to the noble Lord's sense of moral outrage. If I cannot do that, I may not return to it. We shall see. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 73 and 74 not moved.]

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