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("( ) No donation received by a registered party which is registered in the Northern Ireland register from a donor who is a permissible donor by virtue of an order made under section 65 shall be used to make any payment in respect of referendum expenses incurred in relation to Great Britain.").

The noble Lord said: In moving Amendment No. 234YHB, I shall speak also to Amendment No. 234YHC. This leads directly on from my closing remarks on the last amendment and concerns Northern Ireland.

These two amendments would prohibit the foreign funding of referendum campaigns. I cannot help but notice that the Minister did not answer my question, posed twice, about the rich man in Belgium or France who decides to fund the "Yes" campaign for the euro to the tune of £10 million; he funds it in Britain, well in excess of the £500,000 he would be allowed as a participating party. Who would prosecute him? How could he be stopped? The Minister did not answer that. He may answer now.

I want to explore the foreign funding which will be allowed to go into Northern Ireland. We all know that, to allow Sinn Fein/IRA to continue to receive money from America, the Bill is going to elaborate lengths to allow foreign donations in Northern Ireland, basically to one political party, when all other political parties in the UK will not be able to receive any foreign money at all.

I tabled these amendments at the end of last week. I am sorry they are late. They arose out of detailed points in the debate instigated by my noble friend Lord Astor. Last week he asked the Minister, in relation to Amendments Nos. 177A and 178:

My noble friend also highlighted a further loophole. He said:

    "It seems possible for a political party to be set up in Northern Ireland, to receive foreign funding ... and to use that funding not to contest elections in Great Britain, because that is ring-fenced under the Bill, but to campaign in a referendum in Great Britain. What is to stop that?".--[Official Report, 18/10/00; col. 1035.]

Eventually, after being further pressed by my noble friend, the Minister said:

    "I like to be straight with your Lordships' House. The information I have from officials is that Northern Ireland parties can use the fruits of money raised abroad in a UK referendum. That may well present difficulties"--[Official Report, 18/10/00; col. 1038.]

That is an understatement.

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So considerable difficulties arise, especially for the Minister, who went on to say in a later debate--I suspect his brief had not been adjusted in the Dinner Hour--

    "The Government are ... committed to banning the foreign funding of political parties in the United Kingdom".--[Official Report, 18/10/00; col. 1183.]

That is stretching it. Perhaps he actually said "in Great Britain", because they are not going to ban the foreign funding of political parties in the United Kingdom; only in Great Britain.It was an interesting slip of the tongue, if that is what it was.

He went on to say

    "It is right that the ban should extend to the foreign funding of participants in a referendum campaign here. The justification for that policy is that those who participate in our political processes should not be dependent upon funding from those who do not live, work or carry on business here".--[Official Report, 18/10/00; col. 1183.]

However, the Minister neglected to remind the Committee that the Government will not implement that policy when it comes to Northern Ireland.

I do not believe that people who give money to the notorious fund raiser, Martin Galvin, who was mentioned by the noble Lord, Lord Molyneaux, last week, live, work or carry on business in any part of the United Kingdom. However, as a result of the failure to ban all foreign funding, the loophole which my noble friend highlighted last week has arisen. The Minister admitted that it existed.

Under the Bill as presently drafted, in any UK referendum supporters on both sides of the argument could register a Northern Ireland political party on the Northern Ireland register. The party would have to make a declaration that it intended to stand candidates in elections in Northern Ireland. That is easy. Even if the party never did any campaigning in Northern Ireland, it would still benefit from the exemptions in the Bill in the NORAID clause, Clause 65. It could obtain money from foreign sources anywhere in the world--America, Europe, Japan or wherever--and that foreign money could then be used to fund referendum campaigning anywhere in the United Kingdom. There is nothing in the Bill to prevent that.

If the Minister agrees with that argument--if he cannot counter it--and if he chooses not to close the previous loophole, he must close this one. In order to close the loopholes, my amendments would prohibit the Northern Ireland parties from spending foreign money on any referendum campaigning in Great Britain. That would address my point about the front parties. Amendment No. 234YHC would prohibit Northern Ireland parties from using foreign money to fund any referendum campaign, including a referendum campaign in Northern Ireland. I make no bones about the fact that I prefer Amendment No. 234YHC because it would prohibit all foreign funding of referendums throughout the United Kingdom. And I still believe that it is a united kingdom--I do not believe that we should be making a distinction between Great Britain and Northern Ireland.

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The two approaches raise another question for the Minister: do the Government intend to allow foreign funding of referendum campaigning in Northern Ireland in the same way as they are to allow the foreign funding of election campaigns, or do they want to prohibit the foreign funding of referendums throughout the United Kingdom, including Northern Ireland?

I believe that the Minister should respond to those points, especially in the light of the remarks he made last Wednesday, which I quoted. It is really important that, if there ever is a referendum on the status of Northern Ireland as an integral part of the United Kingdom, the result should not be influenced by a vast inflow of money, largely from across the Atlantic. If the Minister says that foreign money cannot fund political parties in Great Britain--for instance, the Scottish National Party which has a legitimate desire that Scotland should be independent and pursues it in a perfectly wholly democratic manner--by Jove, the same rule should apply in Northern Ireland, especially to parties which have not pursued their aims in a wholly democratic manner.

I do not want any nit-picking about the amendments. I want the Minister to address my main question: have I identified a loophole? Will my amendment plug it? If not, will the Minister come forward at the Report stage and plug it? I do not believe that the Government really intend foreign money to come into Northern Ireland and by that route fund referendums in the United Kingdom or in Northern Ireland. I hope that the Government agree with me on that in principle. If they do not like what I have proposed, I hope that they will come forward with their own amendment. I beg to move.

Lord Rogan: It is with pleasure that I rise to support Amendment No. 234YHC, moved by the noble Lord, Lord Mackay.

I, too, share the concerns with regard to referendum campaigns in Northern Ireland. Referendums have previously occurred in Northern Ireland, solely on Northern Ireland issues, notably Heath's "border poll" of 1973. Indeed, the principle of consent in the Belfast agreement allows for the possibility of another "border poll" in the future, although, with respect to a referendum under the Belfast agreement, I consider the point academic; that is to say, it is academic in the sense that I do not believe that nationalism in Northern Ireland will ever be sufficiently well supported to bring about a change in the constitutional position of Northern Ireland. Even if I were to be proved wrong, I do not believe that the unionist people in Northern Ireland could have their votes bought by dollars from North America, just as they were never bullied by weapons bought by dollars from North America during the 30 years of terrorism.

Returning to the amendment moved by the noble Lord, Lord Mackay, I have grave concerns about the potential for front parties, not even contesting elections in Northern Ireland, being used by larger

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parties on the mainland as a means of processing foreign financial support for a UK-wide referendum. Clearly, that is a nonsense situation. If the provision is to remain as it is, it might as well not be present in the Bill at all.

Our nationalist friends in Scotland and Wales could potentially be in a strong position to exploit a so-called "well meaning" non-UK citizen by use of front parties in Northern Ireland, just as Sinn Fein already is, not to mention the political wings of the republican dissidents.

By way of conclusion to my brief remarks, I want to reiterate my strong support for Amendment No. 234YHC. This lacuna in election law must be bridged. However, I shall leave your Lordships in no doubt as to the best solution to this flaw in referendum law. This flaw is a problem but it is the symptom of a greater problem. I strongly urge the Government to stick to its manifesto pledge, treat all UK citizens equally and ban all foreign funding for all UK political parties.

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